- Automotive stocks are best bought in a recession. I’ll explain how patience pays off.
- There are no indications of a recession, but car sales have already reached their ceiling.
- However, a new trend is booming and you may want to expose your portfolio to it.
The automotive industry is a perfect example of sector cyclicality. What’s important for us investors is that cyclicality offers great investment opportunities. However, a lot of patience is necessary as such opportunities usually only arise once in a decade and only when there is a recession.
If we take a look at Ford’s (NYSE: F) stock price over the last 30 years, we can see how stock price dips coincide with economic recessions. The stock was the cheapest in 1991, 2002, 2008, and 2012 when there was a recession in Europe. More →