Recession proof stocks
No stocks are automatically “recession proof”, but some business models can obviously handle downturns in the economy better than others.
A company like Proctor and Gamble, who sells necessary household items that will be bought no matter what, should not be too negatively affected by the economy.
A company like Apple on the other hand is more sensitive to the economy. People might opt to keep their old Ipod if they are low on funds instead of buying a new one or they might buy a cheaper, 600 dollar Dell laptop, rather than a more expensive 1400 dollar IMac.
Recession proof stocks obviously perform better than the market in rough economic periods and worse than the market when things are going well.
Here are my top 4 recession proof stocks:
- Johnson and Johnson [Ticker symbol JNJ]: Johnson and Johnson is a well oiled machine, they are a huge company that simply makes money hand over fist. A recession might slow them down a little but they will still be churning out money left and right no matter what. The next time you think the economy might be in for a rough patch or two, invest in JNJ and reap the benefits.
- General Mills [GIS]: This is another company that the average consumer should be very familiar with. People cut back on their spending during a recession but they will not cut out their cheerios and other cheap, healthy food options. General Mills has been around for hundreds of years and will be around hundreds of years from now.
- Coca-Cola [KO]: Coca Cola is a great investment during periods of downturn in the economy for two reasons. The first is that Coke and coke products are one of the last things to be cut out of one’s budget. The second is that Coke is so diversified these days that it is basically like buying a mutual fund. Coke sells its product in almost every country in the world so you will be instantly diversified and safer by investing in Coke.
- Potash [Ticker symbol POT]: Yes, the ticker symbol is funny, and no, it is not a joke. Neither is this recommendation. Potash sells high quality, cheap fertilizer’s to commercial farmers, a recession does nothing but strengthen their business.