With the recent downturn of the economy, there are a lot of people wondering what they should invest in. It seems like every day the market is sinking lower and lower and the possibilities for making decent returns on almost any investment are low. The reality is there are a few investments that are known to be countercyclical. This means that when the market goes down in value they tend to go up. This article will discuss some of the most popular countercyclical investments.

First there is gold. This is an age old investment and is used as a way of diversifying many investment portfolios. The reason that gold tends to go up in price during bad economic times is because it was once used as a standard for the monetary system. In the olden days a dollar used to be worth a certain amount of gold and so people generally thought of gold as an equivalent to cash. While the nation is no longer on this gold system many people still believe it to be a good safe haven for their money during a down turn. This demand for gold during a recession is the primary reason for its increase in value in hard times.

Another good investment during a recession is bonds. Bond values fluctuate with the interest rate, and when interest rates are lowered bonds become more valuable. Whenever there is a recession the government will lower the interest rate to try and get banks lending pumping money into the economy. When this happens bonds increase in value and are an excellent investment.