As the risk of recession increases, health care, public services and insurance actions tend to outperform. Defensive stocks with low volatility and strong dividends help meteorological slowdowns. In this room, we highlight four actions to the test of recession with stability, income and growth.
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Recession winds have returned to the United States in recent weeks. The Treasury Secretary, Scott Bessent himself, warned that he may not escape it. Caution is notified in such cases, it is therefore preferable to take it and prepare for a potential slowdown in the first world economy.
What actions deserve to bet in the event of a recession?
When markets start to oscillate, some companies always manage to maintain solidity and profitability. So what stocks are best placed to manage a period of uncertainty? There are certain characteristics and sectors that tend to outperform during economic slowdowns.
Among the main characteristics that we must monitor to identify defensive stocks are as follows:
Beta beta: These stocks are generally less volatile than the market.
Attractive dividend yield: Shareholders can obtain a high dividend.
Stable income: The company retains a regular request even in times of economic slowdown.
As for the sectors, it is better to focus on:
Essential consumption: Food, household and essential items at low cost. The demand for these goods remains stable, even during recessions or economic uncertainty.
Health care: Pharmaceuticals, health services and companies offering health products and medical equipment. The health care sector is generally less affected by economic cycles.
Public services: Companies provide essential services such as electricity, gas, water and telecommunications. Historically, the public services sector is more resilient during recessions, as these services are fundamental for daily life and are consumed regularly.
How to identify defensive stocks
To identify the best actions to buy before a recession, you can rely on professional tools, such as …
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