Best Investments During a Crisis 2026

It's no secret that, in recent years, due to the pandemic we've been experiencing since 2020, we have been facing a severe global economic crisis. However, more and more people are deciding to make investments in times of crisis.

While it is true that economic crises cause market fluctuations, they can also be an ideal time to invest. The important thing is to do it intelligently.

Through this article, we aim to teach you everything you need to know about investments in times of crisis, how to identify an economic crisis, the importance of investing at this time, and which businesses are best to invest in. We invite you to keep reading.

What is an economic crisis?

Simply put, an economic crisis is a difficult time for the economy and can be identified when companies start producing fewer goods or services and consumers decrease demand (fewer products or services are bought). The economy stops growing, stagnates, or begins to decline.

Economic crises are part of a cycle, and although it may seem illogical, they are necessary for periods of growth and prosperity to occur. In developed countries, growth commonly resumes after a period of crisis. That said, the timing of each of these stages depends on different factors, and they do not occur in all economies in the same way.

Considering the economic cycle, an economic crisis is the period where the economy significantly declines.

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An economic crisis can be isolated, focused solely on one sector, or it can be local, national, or global. The last global crisis we experienced, which still has some effects on our economy, is the one we went through as a consequence of the 2020 coronavirus pandemic.

Furthermore, it should be noted that economic crises have two prominent characteristics. The first is that they cause instability in some markets, and the second is that the consequences they bring affect some sectors first, and then the rest of the system.

How to identify an economic crisis?

To determine whether there is an economic crisis or not, special attention can be paid to certain indicators. One of the most widely used and known is the so-called fear indicator or the CBOE VIX. This indicator is used to gauge market volatility. If the market is stable, this fear indicator should be between 15 and 20 points. If, on the other hand, the market experiences high volatility, the indicator should be above 30 points. Other indicators commonly used to signal an economic crisis are employment levels and GDP (Gross Domestic Product).

Key Indicators for Evaluating an Economic Crisis

1. Fear Indicator - CBOE VIX

• Definition: The VIX measures the market's expectation of future volatility, based on the prices of S&P 500 index options. It's known as the "fear index" because it tends to rise during times of market uncertainty and volatility.
• Interpretation:
  • Stability: Between 15 and 20 points.
  • Moderate Volatility: Between 20 and 30 points.
  • High Volatility/Crisis: Above 30 points.
• Relevant Historical Events: During the 2008 financial crisis, the VIX reached record levels above 80 points, reflecting immense uncertainty and panic in the markets.

2. Employment Levels

• Unemployment Rate: A significant increase in the unemployment rate is a clear indicator of a crisis. Typically, an unemployment rate above 5% is considered concerning, and levels above 10% can indicate a deep recession.
• Labor Force Participation Rate: A decrease in the labor force participation rate can indicate that a portion of the population has stopped looking for work, which is also a sign of economic weakness.
• Formal and Informal Employment: Analyzing the types of employment and their stability is crucial. The proliferation of informal jobs can be a sign of underlying economic problems.

3. Gross Domestic Product (GDP)

• Definition: GDP is the total value of all goods and services produced in a country over a specific period. It is a key measure of economic activity.
• GDP Growth:
  • Positive Growth: Annual GDP growth above 2% is considered healthy.
  • GDP Contraction: Two consecutive quarters of negative GDP growth are defined as a technical recession.
• Detailed Analysis: In addition to the growth rate, the composition of GDP is observed to assess the industrial sector, services, and private consumption.

4. Price Indices

• Consumer Price Index (CPI): A rapid increase in the CPI can indicate inflation, which is common in economic crises due to rising prices of goods and services.
• Producer Price Index (PPI): Also important for assessing inflationary pressure in production and input costs.

5. Fiscal Deficit and Public Debt

• Fiscal Deficit: A high fiscal deficit, where government spending exceeds revenue, can be a sign of serious economic problems.
• Debt-to-GDP Ratio: A significant increase in the public debt-to-GDP ratio suggests debt sustainability issues.

6. Stock and Bond Market

• Stock Market Indices: A decline in stock market indices like the S&P 500, Dow Jones, or Nasdaq can reflect a crisis of confidence in the economy.
• Bond Yields: An increase in long-term bond yields can indicate an expectation of future inflation or a potential debt crisis.

7. Consumer and Business Confidence

• Consumer Confidence Indices: A decrease in consumer confidence, as measured by surveys like the University of Michigan Consumer Confidence Index, can be an indicator of an economic slowdown.
• Business Confidence Indices: Business confidence, assessed through surveys of CEOs and CFOs, is crucial for forecasting production cuts and investments.

8. International Trade

• Trade Balance: A persistent trade deficit can indicate structural problems in the economy.
• Exports and Imports: A significant decrease in exports and imports can reflect a contraction in global and domestic demand.

Historical and Comparative Context

• 2008 Crisis: The global financial crisis was reflected in a VIX exceeding 80 points, negative GDP, and a rise in global unemployment.
• COVID-19 Pandemic: In 2020, the VIX reached record levels due to global uncertainty. The global economy contracted drastically, with global GDP falling and unemployment reaching historical levels.

Additional Factors to Consider

• Monetary and Fiscal Policy: Decisions by central banks (such as interest rate reductions) and expansive fiscal policies (such as stimulus and subsidies) are crucial for mitigating the effects of a crisis.
• Geopolitical and Natural Events: Political crises, wars, and natural disasters can exacerbate existing economic conditions.
• Technology and Structural Change: Digital transformation and structural changes in the economy can influence the dynamics of crisis and recovery.

What are the causes of an economic crisis?

An economic crisis can arise for various reasons; below, we list the most common ones:

• Poor implementation of economic policies by governments often triggers a country's economy to enter a crisis.
• Poor monetary policies. For example, uncontrolled money printing.
• Natural, social, political, and health catastrophes. The best example is the COVID-19 pandemic we recently experienced, which led to a terrible global economic crisis. Additionally, an earthquake, floods, or social unrest can also disrupt the entire economic machinery locally or globally.
• Fluctuations in raw material prices. The best example is the economic crisis that occurred in several countries due to the drastic drop in oil prices. These fluctuations can disrupt the economies of many countries, especially those dependent on such raw materials.

Why invest during a crisis?

For some investing in times of crisis may seem counterintuitive, because it's seen as a time of high volatility and risk, but the reality is that if we analyze the situation thoroughly, we'll realize it can be a time of great opportunities.

“The best fish are caught in rough waters”

We'll give you an example to help you better understand what we mean. As we already mentioned, in 2020, due to COVID-19, we experienced a pandemic that led to one of the worst economic crises in recent years.

During that period, due to lockdown, the tourism sector was terribly affected; one could even say it almost completely halted, causing millions in losses. However, on the other side of the coin, the pharmaceutical and biotechnology sectors grew exponentially and evolved considerably.

Another clear example would be buying homes after the 2008 housing crisis. After the financial disaster caused by poor banking policies in mortgage lending, the real estate market and the economy in general experienced a period of instability.

However, those who were able to see the opportunity generated wealth by buying homes at bargain prices.

Therefore, in times of economic crisis, the first thing we should think about is protecting our money and taking advantage of the opportunities that arise, and there's no better way to achieve this than through investment.

A timely and correct investment will help us keep our savings protected during and after the crisis. Making investments in times of crisis, additionally, can help start generating passive income and protect our capital from inflation.

However, remember that you must make smart investments, so before making any decision, thoroughly study the market and determine what you can invest in, according to your resources and objectives. Below, we'll give you some ideas.

Best investments in times of crisis

The investments in times of crisis can be very extensive, but before you choose any, it's necessary to consider some aspects to ensure it's truly the best option.

Therefore, it's important to understand during this time of crisis that you should look for investments that allow you to maintain and also grow your money. Although the type of investment to make will be directly related to the crisis situation at that moment, below are some options that generally tend to perform well during a crisis.

Investments in real estate during times of crisis

One of the oldest and most profitable forms of investment is real estate. Now, the real estate market isn't always in a good place, but precisely that situation is where we can find the greatest opportunities to generate long-term wealth.

The real estate market may experience downturns, but it always returns to a point where it offers a certain return on investment.

Additionally, it allows us to protect our savings against inflation and the loss of purchasing power.

But as you might be thinking, not everyone has the opportunity, knowledge, or capital to invest by buying a home or commercial property to sell or rent in the future. That's why today we find alternatives that make it easier to invest in the real estate sector with little capital and attractive returns.

In this regard, at Domoblock we make it easy for you. You can invest in exclusive properties located in Spain, starting from just €200, and earn annual returns exceeding 15%, without worrying about any management or bureaucratic procedures. All through a 100% digital investment platform, regulated by the National Securities Market Commission (CNMV).

Investment funds

It's already clear that it's advisable to make investments during a crisis, and one of the best ways to do so is through investment funds.

An investment fund consists of a grouping of various stocks and bonds, with the aim of offsetting poor results with good ones. Multiple investors are part of these funds, and they can buy or sell shares whenever they wish, without incurring any penalties.

A positive aspect of this type of investment is that they are managed by experts in the stock and investment market, so they will have the experience to adjust everything, reducing risk and increasing profitability. However, this does not mean that their results will always be positive.

Our advice is to review how a fund has performed in the past, what results it has achieved, who the managers are, and how it has performed compared to its peers.

In Spain, we can find a fund that has had good results in recent years called True Value. It has different sub-funds that operate with various types of companies (small caps, large consolidated companies, or a mix of both).

Investing in defensive stocks during economic crises

In the world of investments, there are what are known as defensive stock investments. These are assets that can maintain their price during times of crisis, and may even increase it.

Typically, these investments are made directly in essential markets. An example of this is investing in the food or healthcare market. During times of crisis, it's a good idea to invest in food companies or those related to basic healthcare, as even in crisis situations, these sectors must remain operational to cover the population's basic and essential needs.

But once again, remember that not all companies in the healthcare or food sector will perform well during a crisis. Therefore, you should first conduct an analysis, study their competitive advantage in the sector, and observe how they have performed in previous crises.

The opposite is true for cyclical sectors, such as automotive, industrial, or energy, which tend to perform worse than average during times of crisis.

Investment in Safe-Haven Assets

During times of economic crisis, especially in countries where the currency constantly devalues due to political instability or uncontrolled inflation, the most viable option to protect money is to invest in financial safe havens.

Financial safe havens are a good way to protect money when markets fall, as they withstand downturns better than money itself. Below are some examples of safe-haven assets:

• Gold: Investing in gold is one of the most common forms of investment, as it can protect your money during times of crisis. Gold is considered a defensive asset because it can withstand severe economic crises, unlike other assets.
• U.S. Treasury bonds: Even though the U.S. economy has suffered considerably during periods of crisis, U.S. Treasury bonds are still considered a risk-free asset, making them a viable investment.
• Real Estate: Investing in real estate located in other countries with political stability is one of the best options to protect against local inflation and economic instability.

• German Treasury bonds: Similar to the U.S., German Treasury bonds are still considered a risk-free asset, making them a good investment option.
• U.S. Dollar: Typically, in most countries where the currency devalues, the dollar is the reference currency. Therefore, one way to cope with currency devaluation and inflation is to hold everything in U.S. dollars to maintain its value over time. real estate properties

Communications and Social Media

The communications and digital platforms market has grown enormously in recent years, as the way we communicate has changed significantly. That's why investments in social platforms, websites, and everything related to telecommunications have grown abundantly.

This growth precisely occurred during the most difficult pandemic times, as due to the several months of lockdown experienced, some businesses had to resort to digital means to stay afloat.

Today, even though things have gradually returned to normal, the growth of the telecommunications and platforms world continues to thrive, a trend many entrepreneurs have capitalized on by opening e-commerce and dropshipping businesses, or online stores on social media.

Conclusion

Economic crises certainly have two sides. One is the problems and all the negative consequences they produce. The other is the opportunities they can offer.

Believe it or not, economic crises offer us opportunities for growth. That's why, even though it might seem contradictory, making  investments during a crisis will always be an excellent option to protect your money and generate a new source of income.

Currently, you have many options, so you need to focus on carefully choosing the investments that are best for you during these times. Something you can consider during a crisis is whether you only want to protect your money, or if you're also looking for ways to multiply it.  

Obviously, in both cases, there's a risk factor you need to consider. But remember something very important: doing nothing also carries a significant risk.

What do you think about investing during a crisis? Are you already implementing any strategies?

Share your thoughts in the comments. We'll read them.

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