When a recession hits, everyone is affected economically. There are unaffordable hikes in the prices of products, and even, day-to-day living can be so hard. This has to be a long-standing issue which nobody had been able to forecast when it would happen. In my post “When would the stock market crash?” I explained how impossible it can be to predict an economic fall. The only solution is to get prepared when it strikes.
Hello, and welcome to my blog. Today’s episode will be talking about what recession-proof stocks to go for after a crash in the market. This is especially targeted this year 2020 when the world is going through a Recession and battling not to fall into depression.
5 Recession-proof Stocks, You Should Be Investing In
This is a company that will continue to stand, be in demand, and gain more popularity. Why? Let’s say that truly the world is facing a Recession; there will be a quick fall in the Gross Domestic Products (GDP). This means that many will lose their jobs and their businesses.
However, even when this happens, people still need to eat. But of course, they will go for restaurants that serve at cheaper costs. McDonald’s remains one of the options that are very easy and simple when it comes to the matter of a quick-fix.
Apart from keeping their current customers, they will be attracting new customers who cannot afford the high-class meals as before. With over 18,000 thousand outlets in the world, McDonald’s continues to spread across nooks and crannies of the earth. This means they have a strong international presence.
Buying a share of McDonald’s now goes for about $186.10. You gain a $5 dividend at a yield of 2. 8%. The earnings are about $8 per share, which gives them a PE ratio of 23.6%. This is an exceptionally great price for the value of the company.
This Company makes products ranging from offices, school supplies, cleaning, and health care. A good number of these products would continue to be demanded by people irrespective of the situation of the market.
A hundred years ago, 3M paid dividends to shareholders, and have been consistent ever since. They have even increased their dividends over the last 61 years. This does not only earns them an Aristocrat of dividends but also sets them in a reputable position in the recession-proof stocks business as the king of dividends. Their dividend payment is at $6 per share at a yield of 4%. Earlier in the year 2020, they sold at $180 per share in July, it goes for $146.
This is a company that has proved itself. The grocery store chain department has had an increase since the pandemic began. At the beginning of 2020, most stocks were faced with troubling waters, but Walmart somehow was able to sail peacefully. This is because they kept producing and selling cheaper products that were affordable to consumers. Although they are predominantly in the USA, they are also an international company.
Started in the year 1946 by Sam Walton, they earned little popularity. Come fifteen years after; they began to spread like wildfire. By then they already had a total of 181 shops. They continued to expand from time to time, and after another 15 years, they already reached 1, 340 stores. As of the year 2006, they were almost everywhere in the US.
This earns them an extremely strong advantage over their competitors. You might be eager to ask about the E-commerce company, Amazon. How would they affect the company? Walmart has remained strong in the market of E-commerce. They have purchased a lot of E-commerce companies in recent years, which has resulted in high growth of about 40-60% each passing year.
What are the things you seek in a company that could perform better during the recession period? Are you seeking for a business that is established with a strong historical background or a business model that is reliable? Is it a dividend that is consistent? Union Pacific has got you fully covered. Established in the year 1969, they are a publicly traded railroad company. They perform services that are essential such as coal products, automotive, chemicals, and agricultural products around the US.
Even in a Recession, Pacific services would still be required. They also have a Duopoly in the railing business. In terms of figures, it’s very high. Since 1999, there has been a constant increase in its cash flow and dividends. It is a good conclusion to say there is safety in their dividends.
In the 2008 housing bubble crash, there was an increment in their dividend payout. From $180 to $150, their price has fallen reasonably but they have got a dividend yield that is stable at 2.7%.
This may probably be the best investment that can be employed when you want your portfolio crash proof. During the bubble crash of 2008 that lasted months, the gold price never dropped. Actually, it increased at a certain period. The value was doubled in two years from 720 points to 1,790. Gold is a safe haven investment and comes in three different forms, gold features, gold options, and gold itself as an investment. The last option always comes with additional fees for storage.
Finally, it is essential to know these two things.
Even if you purchase the most Recession-proof stocks, it will still go down over a long haul during the Recession. This means it’s only an extremely uncommon business that will go up when the economy melts. Not that these businesses will not go down, but would not be as affected as others. Gold is one of these businesses that will never get badly affected even in the worst points of any Recession.
We are all in search of a way to keep earning money from our investments. It is inevitable to have a market crash, so the best solution is to go for recession-proof stocks that can survive the test of hardships. If the 2020 pandemic has taught investors anything, it is that there are certain things more essential than people realize. This knowledge is what you should harness when choosing your stocks this year.
Well, I sense you are keen to know which knowledge to harness….right? Stay tuned in subsequent posts for it. If you would like to see other great blogs, you can check out my post ‘4 Easy and Useful Tips on Becoming a Millionaire’. Thank you for sticking around. Leave me your comments and opinions, and I will reply as best as I can. Like and share if you enjoyed the post and if you want more of this type of posts subscribe to my channel.
For further information, I would suggest reading the following books:
- Rule #1: The Simple Strategy for Successful Investing
- The Barefoot Investor
- Investing QuickStart Guide
- Investing Demystified
- The Five Rules Successful Stock Investing
If you are looking to open an investment account, follow these links below:
- Passive income
- Silver & Gold coins
- Interactive Brokers
(‘68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.)