Many investors are are feeling the inevitable recession may present some buying opportunities among ASX 200 shares but are uncertain which ones to target.
Whilst I still believe in buying and holding for the long term, there are definitely some ASX 200 shares I’d have my eye on in the event there is another downturn this year.
3 ASX 200 shares to buy in a recession
Fortescue is one of the world’s leading iron ore miners and could benefit from a mining and infrastructure boom. When the GFC hit in 2008-09, it was Chinese demand for iron ore that helped pull the Aussie economy through.
While that is unlikely to be the case in 2020, surging demand for iron ore could still help boost economic activity.
That’s good news for the ASX 200 mining share if demand continues to climb higher.
Other than Fortescue, I also like the look of Coles Group Ltd (ASX: COL) in a downturn.
The Coles share price has rocketed 13.3% higher this year and was one of the gainers in the recent bear market.
ASX 200 supermarket shares did well in March and I could see them experiencing strong demand again if there is another downturn. Those defensive qualities and non-cyclical earnings could definitely make Coles shares worth buying in 2020.
National Storage derives its income from rent paid by its self-storage unit users. A big economic downturn could hit residential real estate hard and mean more downsizing and ‘rightsizing’ from Aussie households.
This could be good news for the ASX 200 REIT share and its dividends on the back of strong earnings.
No one knows if, or when, the next share market downturn will hit. These are just a few of the ASX 200 shares that I’ve got my eye on if the market turns south.
Of course, I believe it’s essential to consider investing for the long term rather than just trying to capitalise on a downturn. But if you can pick up some defensive shares to diversify your portfolio at decent prices, then I see that as an added bonus.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.