4. Go for the gold
Gold has been a safe haven during at least the two most recent U.S. recessions. In the period between December 2007 and June 2009, which marked the longest recession since World War II, gold futures gained 18%. In the same period, the Dow Jones Industrial Average lost 37%.
During the recession of 2001, which lasted between March and November of that year, gold gained 3.3%, while the Dow lost 5.7%.
"We are close to a 'double dip''' recession, and gold is still the fear trade, said James Cordier, a portfolio manager at Optionsellers.com in Florida.
A recession would keep near-zero interest rates for longer in Europe and the U.S. and bring currency devaluation, both key pillars of support for gold. The metal, seen as the ultimate store of value, would do well in a recessionary environment even as its price marches higher, Cordier said.
"A double-dip recession is more reason yet to buy gold," he added. "Gold as a currency will become more and more popular."
"Gold is in the process of getting re-established as a reserve asset for most central banks because it's a natural hedge to their other reserve assets, mostly government bonds," said Dan Amoss, the editor of the Strategic Short Report, a newsletter dedicated to uncovering irregularities in financial reports.
"All central banks will be looking to increase their physical gold reserves in lock step with the increasing sizes of their balance sheets," Amoss added. "So should wealthy individuals. And institutional investors, as usual, will probably be last to buy gold at much higher levels."
MarketWatch reporters Claudia Assis, Myra Picache, Sara Sjolin and Kate Gibson contributed to this report.
