Google search queries for the term “recession” are at the highest point since prior to The Great Recession in 2008. Most financial analysts fear there is no such thing as a possible soft landing for the economy now that the Fed is forced to raise interest rates.
Investors are in a panic, and as a result, asset valuations are in free fall against the dollar. US stock indices, Bitcoin, gold, the euro, and anything else quoted in USD terms have been in collapse. Returns are harder to come by for investors who can only buy and hold during a bull market.
For traders on PrimeXBT, however, it is possible to build a recession-proof trading portfolio and fight back against a bear market. Here’s how.
No Soft Landing For Stocks And Crypto
Over the last several years, low interest rates following the pandemic promoted a historic bull market. All major stock indices set new highs globally, while Bitcoin blasted off to more than $60,000 per coin.
But as soon as the US Federal Reserve began talking about quantitative tightening, risk assets started a downward spiral that’s still going strong. Soaring inflation has shaken up the financial system and brought on a bear market in a flash.
And there aren’t any signs of stopping. There must be another way to survive.
Long And Short Positions Make Profits Possible
PrimeXBT is an award-winning margin trading platform offering leveraged long and short positions on a wide variety of global markets. Available assets include crypto, stock indices, commodities, and forex currencies.
Between the trading tools and mix of digital and traditional assets, building a risk-averse and highly profitable recession-proof portfolio becomes possible.
But what markets exactly should traders consider, and how can they get positioned?
Build A Portfolio Across Many Asset Classes
All markets are cyclical, and in intermarket analysis, capital flows from one asset class to another, then so on and so forth. Markets tend to peak and bottom in the following order: bonds, crypto, stocks, commodities, and finally, currencies.
Currently, the dollar is on a huge run, following the same type of behavior in Bitcoin, the S&P 500, then commodities like oil and natural gas. These assets have since corrected, so it is wise to consider that the dollar could soon fizzle out, and risk assets could see some relief.
This is why the flexibility provided by long and short positions — even hedge positions — is a must to stay profitable during market turmoil and turbulence.
Oil And USD Soar While Risk Assets Suffer
With the dollar on the rise, going short any trading instruments paired against USD is an ideal portfolio hedge for those who hold stocks or crypto.
Oil prices have been soaring, and a long trade could have kept a stock- or crypto-heavy portfolio in the green during the recent downturn.
Shorting risk assets is the rage right now, which is why having proper stop loss tools and the flexibility to go long when the trend changes can be so important.
The Gold Standard Of Safe Haven Assets
Although precious metals haven’t quite been the safe haven they are known for, this negative trend in gold and silver must eventually turn around.
Gold and silver have been used for hundreds of years to fight inflation and are some of the best monetary systems ever to be used.
PrimeXBT offers the gold standard in trading assets, with a list of more than 100 to choose from.
Summary: Profit During A Recession With PrimeXBT
PrimeXBT is also home to the Covesting copy trading module, weekly competitions, and many other tools designed to help traders win when times get tough.
During a bull market, everyone is a genius. During a bear market, the brilliant move to PrimeXBT to prepare their portfolio for a possible recession ahead.