Ironically gambling is one industry which always does exceptionally well during a recession or economic crisis. The reasons being that some feel that their bad luck is set to improve, others look towards alternative means of generating extra cash and some simply have more spare time to have a bit of fun. Spread betting is no different and many of the industry-leading brokers such as IG Index are doing exceptionally well despite the apparent reduction in disposable incomes.
Spread betting, however, is somewhat different to traditional forms of gambling and more often relies on the skill of analysis and rational thinking than a lucky break. For this reason alone it is possible to consistently make money spread betting during a recession than it is in a casino or bookmakers. With spread betting you can give yourself the winning edge rather than allow the casino to always win in the long term. This requires a bit of research, logic and a good deal of patience.
Spread betting in a recession brings out all of the usual tips of those industries which are described as being ‘counter-recession’. These are the essential and innovative industries which are still able to generate money regardless of the economic climate such as pharmaceuticals or those that actually grow as a result of peoples economic misfortune, such a debt assistance companies, liquidators and administrators. Thinking about what is doing well on your high street may also be a good place to see the beginnings of good alternative investments. Jewellers offering to buy gold , for example, are in the wonderful situation of buying (often cheaply) unwanted gold from those wanting a fast cash exchange and selling the gold on at its most expensive which is during a recession.
Commodities such as gold are a good spread bet option at the beginning of a recession when the value of the worlds financial ‘safe haven’ hit remarkable highs. During the past year gold has risen from $1.350 to $1.900 at its peak due to the economic instability and investors moving away from riskier assets. Although gold may now be cooling off in the short-term the Eurozone crisis which is struggling to find a resolution threatens to push the euro lower during 2012. A medium-term spread bet on the euro moving lower against the dollar during 2012 would be both logical and realistic. If the entry can be timed well this could be a very rewarding trade by the end of the year.
Similarly, if we know that gambling is doing particularly well in an economic recession then a long spread bet on some of the most profitable companies in the industry may be a smart move. Alternatively, taking a position on those companies who help people to find solutions to their debt problems can only be doing better business during a recession. A spread bet in the Debt Management sector may also prove to be a good use of a bad situation.
A recession is when your friends lose their jobs
A depression is when you lose your job
The Armaggeddon is when your boss loses his job.