Since the pandemic began, tough economic realities filled the news pages every day. The economic downturn put many people in hardship and nobody escapes feeling the negative effects brought about by a recession.
However, like everything else in life, it is not all doom and gloom. There are some things that actually improve during a recession. Below are a few silver linings that follow a recession.
- Cheap stocks
It is a basic investing strategy – buy low and sell high. In a recession, stocks fall and it is a great opportunity to go bargain hunting. While others abandon what seems to be a shinking ship, you can get on board and buy more stocks while shares are cheaper.
Markets go up and down and it is a good time to buy when the market is on sale. Of course, there is no guarantee what happens in the future but if you invest for the long-term, the market will eventually bounce back and you will make money on your shares, especially if they are blue-chip stocks with dividends.
- Lower death rate
Interestingly, death rates can fall following a recession. In fact, between 2005 and 2010, mortality rates decreased as the unemployment rate in urban places increased. One of the biggest contributions to the lower death rate was a decline in the cardiovascular disease mortality rate, as well as fewer deaths from car accidents. There is no direct link between a recession and lower death rates but it seems that people stay in more often in a recession and have little money to spend on going out and unhealthy meals so mortality declines.
- More opportunities for reflection
In a recession, people have time to reevaluate their priorities and adjust accordingly. For example, in the heat of the Great 2009 Recession, the savings rate increased to 6.9% — its highest level since 1993. Additionally, people have more time to think about their life choices in tough economic times. When material spending lowers, people appreciate the other aspects of their lives that fill them with value and meaning. It is definitely a good side effect of a recession.