The Recession Is Handing Us Rare Profit Potential

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We might not like it, and we haven't asked for it, but the fact is we're invested in a market unlike any other - the most uncertain and volatile for 100 years or more.

But that means savvy, nimble investors are presented with opportunities just as rare.

Whether that's the race for a COVID-19 therapy or vaccine, or new technologies that make remote business and communication better, or space exploration, sweeping geopolitical changes, or something yet unknown but just around the corner, the most profitable investors will be those who are ready for anything and everything that might come their way.

And that's precisely what we'll be doing in my new, free service, The Long and the Short of It. It's perfect for all investing and trading styles.

For conservative investors, there will be "first-mover" chances to reap rewards on long-term trends that will take 12, 18 months or longer to unfold.

And for aggressive investors, there will be "fast-mover" plays that will see us cashing in on short-term events that could present paydays next week or 90 days from now.

I'll tell you everything you need to know to fill your time horizon with profits.

Here we go again.

Let's be clear: We're already in the middle of a deep recession. The market's Thursday sell-off, fueled by concerns about reopening the economy and a resurgence of COVID-19 infections, simply brings stocks more in line with an unpleasant economic reality.

The resurgence of fear and uncertainty will push investors to the sidelines again. This will create new opportunities for "smart money" - investors who know how to play the long- and short-term impacts to maximize our gains.

Today we're going to look at a little-understood industry positioned to reap massive gains because of the Coronavirus Recession...

This Sector Will Thrive After COVID-19

Until Thursday, the stock market had been skyrocketing. But that upward surge hid the steep decline in many businesses in struggling sectors like media and entertainment, and real estate.

Private equity (PE) firms have been rushing in to buy businesses on the cheap with the intention of restructuring and supporting these companies until the economy improves. They can be sold then for multiples of the prices PE firms have paid for them.

Private equity funds formed during difficult years like 2002 and 2008 enjoy much higher long-term returns than those PE firms that formed during boom times.

That's no coincidence.

Now, while it's true that most of us lack the liquidity required to directly invest with the giants of private equity, anyone can make a lot of money by aligning their capital with private equity.

What's more, there are several publicly traded private equity firms where we can buy shares.

These firms will earn a percentage of the profits earned by the funds as well as management fees every year the fund exists.

So we'll take part in those gains by owning the stock. The higher returns will generate higher fees, which will help drive the stock price of these firms a lot higher over the next several years...

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Garrett Baldwin

About the Author

Browse Garrett's articles | View Garrett's research services

Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.

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