In 2009 during the real estate crisis, I purchased 2 properties for rentals for fairly cheap. They had depreciated by about 35% at the time when I purchased. They've since almost doubled in value ($120k=>~$220k ea) and have had a nice little cashflow ever since. I put down 20%. My mother did the same when she retired and purchased 6 outright and 2 mortgaged. She lives comfortably in retirement on a $11k/mo income, which will not ever go down since it's not in a "retirement account." She can also will them to her children. There are many advantages for real estate investments if you can hold onto them, especially if you can pick them up below regular market conditions. That's just money in the bank as the prices will increase to regular levels again.
Assuming your mother and yourself each have your own residences, your 2 households own 12 properties. Your situation isn't unique. Investors over the past decade went on a massive buying spree that has reduced the pool of affordable, available homes.
Assuming you put down 20k on the 100k homes, you've returned 500%. That is incredible, but also fairly common story from the past few years. "I made it rich with real estate!" "How?" "Easy, buy at a historically low price."
The word is out, it's not a secret to success anymore. There is a pile of money out there waiting to invest in under-priced homes. This drives prices up! Because of this, a recession will not trigger a home price drop.
Property values will likely remain stable/inflated until something happens to break whatever math it is that keeps investors invested. It's the massive stockpile of homes investors gobbled up in 2009-12 that need to be released back to the market. It is a self-perpetuating cycle, people rent a home because home prices are too high due to investor held inventory. Then investors keep renting their asset out because renters don't graduate to buying.
I could be way off, or have missed something obvious, but I don't think real-estate is going to be the big moneymaker form this recession unless something happens to dramatically increase inventory in places with jobs.
If the corporate bond bubble blows up as expected, looking into credit default swaps (CDS) seems like an intuitive answer. It's basically an insurance against a company defaulting on its debt. (Or as some would put it, the financial equivalent of you buying a fire insurance on your neighbor's house, without anyone asking if you happened to be an arsonist.) Doing so comes with a caveat in the current context: if the corporate bond bubble blows up, the main ones taking the hit are the banks. And if that blows up the financial system with it, again, neither taxpayers nor the Fed and the ECB are in a position to save the banking system. So you might end up in a situation where you've a winning lottery ticket but nowhere to collect.
An alternative mentioned in sibling comments -- which I completely agree with -- is to wait it out holding cash. This assumes you trust there won't be inflationary pressures. Depending on viewpoint there should be lots of that or deflation. It also assumes you're able to trust some institution to hold your cash and making it available when you need it. IMO that is less of a given, considering current private debt levels, if shit really hits the fan hard. But you never know, perhaps we can survive yet another 2008 type of crisis, and kick the can further down the road yet again.
Not much more easily than making money off of anything else. The threat of a recession is widely known; for any financial maneuver that could take advantage of it, the "returns if a recession hits" factor is already priced in.
Unless you have a PhD in quantitative finance, it's usually best to take it as axiomatic that you don't have a knowledge-based edge in the stock market, or anything similar.
It is going to be difficult, as your bets (trading options) are tied to timing. Same issues with Inverse ETFs. Usually it can take a couple of years to play out, by trapping people (bull/bear trap) on both sides of these bets.
Not a financial adviser, etc, but probably by making sure you have an adequate safety net and by continuing to buy and hold into a well-diversified portfolio come what may.
I think you're being a bit harsh here (although OP's phrasing is a bit crass)- it's reasonable to want to hedge yourself against a downturn.
I'm not actively seeking to make money off a downturn aside from contributing to my 401k, which invests in a diversified mutual fund (I can't invest more actively for regulatory reasons). My main goal if that happens is to keep my job.
