‘Hold on to your money’: Jeff Bezos just issued a financial warning and says you should reconsider buying a ‘new car, fridge or whatever’ – 3 better recession-proof buys
Amazon founder and CEO Jeff Bezos is sounding the alarm.
In an interview with CNN, Bezos says the economy “isn’t looking good right now.”
“Things are slowing down. You see layoffs in many, many sectors of the economy.”
And that means you might want to tighten your budget.
“If you’re an individual considering buying a big-screen TV, you might want to wait, keep your money and see what happens,” the billionaire recommends. “The same goes for a new car, a fridge or whatever. Just remove some risk from the equation.”
That doesn’t bode well for investors.
But not all companies are created equal. Some — like the three listed below — could do well even if the economy slips into recession.
Do not miss
Utilities
The utilities sector consists of companies that provide electricity, water, natural gas, and other essential services to homes and businesses.
The industry isn’t fascinating, but it’s recession-resistant: no matter what happens to the economy, people will still need to heat their homes in the winter and keep their lights on at night.
High barriers to entry protect the profits of existing utilities. Building the infrastructure needed to deliver gas, water or electricity is quite expensive and the industry is heavily regulated by the government.
Thanks to the recurring nature of the business, the industry is also known for paying reliable dividends.
If you’re looking for the best utility stocks, the stocks in the Utilities Select Sector SPDR Fund (XLU) offer a good starting point for further research.
The story goes on
healthcare
Health care is a classic example of a defensive sector as it is uncorrelated to the ebb and flow of the economy.
At the same time, the sector offers great long-term growth potential due to favorable demographic tailwinds – particularly an aging population – and numerous innovations.
It might be difficult for the average investor to pick specific healthcare stocks. But healthcare ETFs can offer both a diversified and profitable way to gain exposure to this space.
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The Vanguard Health Care ETF (VHT) offers investors broad exposure to the healthcare sector.
To target specific segments of healthcare, investors can look to names like iShares Biotechnology ETF (IBB) and iShares US Medical Devices ETF (IHI).
property
It may seem counterintuitive to have properties on this list.
While it’s true that mortgage rates have risen, real estate has actually shown its resilience in times of rising interest rates, according to investment management firm Invesco.
“Between 1978 and 2021 there were 10 distinct years when the federal funds rate rose,” says Invesco. “Within those 10 identified years, US private real estate outperformed equities and bonds seven times and US public real estate six times.”
Well-chosen real estate can offer more than just a price increase. Investors can also earn a steady stream of rental income.
But you don’t have to be a landlord to invest in real estate. There are many real estate investment trusts (REITs) as well as crowdfunding platforms that can help you get started on becoming a real estate mogul.
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This article is informational only and should not be construed as advice. It is provided without any guarantee.