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Published: Jun 25, 2020 7 min read

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Kiersten Essenpreis for Money

If you thought you knew the typical rules of investing during a recession, the coronavirus may have proved you wrong.

Usually, defensive stocks tend to fare better during an economic downturn. These include essential industries, like utilities (water, gas and electric), consumer staples (food, drinks and hygiene products) and health care. Cyclical stocks, on the other hand, have a harder time weathering a recessionary storm, as people stop buying discretionary purchases. Industries that fall into this category make products that are not completely necessary, like durable goods (think furniture and cars).

But this downturn flipped the script.

“I’ve been in this business for every boom, bust and recovery cycle since 1983,” says John Stoltzfus, chief investment strategist at Oppenheimer Asset Management. “But COVID is different.”