**This is not a political post**
There is a lot of talk of Recession and Inflation, with little practical advice. I am not speaking to the merits of the recession, if it's being denied, when will it get better, etc. These are also ways to protect against inflation, which, no matter where you lie on the economic spectrum, must be factored in when looking at long-term investments. These are historically proven methods to help protect your investments in times of economic downturn.
- Dividend Stocks: Relatively price stable stocks that continue to pay out consistent dividends, if not raise them. Some stocks such as $T and $INTC pay dividends and have price upside going forward. Some stocks specialize in dividends, such as Real Estate Investment Trusts (REITs) That rely on maintaining stock price while using profits to pay out dividends and expand real estate holdings. They occasionally will spike in price (such as $STAG during the COVID warehouse expansion) but otherwise are intended to maintain their price or go up slightly while paying dividends. Rather than some sectors being very speculative/forward-looking, REITs are meant to be more straightforward in terms of what money goes to and how revenue is generated. This lack of "optimism-reliant," growth is a reason why they are extra attractive during prolonged downturns.
- Blue Chips
- AT&T ($T) - Comms, more price stable than $VZ or line layers,
- Intel ($INTC) - Tech, Chips, Domestic Semiconductors (one day)
- McDonald's ($MCD) - Poverty Food.
- Lockheed Martin ($LMC) - Military hedge (We're not going to slow down military spending or aggression, no matter how bad the economy gets)
- Apple ($AAPL) - Hardware, Software, Payments, etc. America's tech titan.
- Visa ($V) - People still need to make payments.
- Real Estate Investment Trusts - REITs (Discalimer: REIT sector already had a +41% increase in 2021, though down 15% in 2022. [source])
- STAG Industrial ($STAG) - Industrial warehousing, partnered with Amazon, price increase on top of dividends
- Blackstone Mortgage Trust ($BXMT) - Owner of real-estate and real-estate loans. Ability to finance high dollar amounts all cash due to major backing of Blackstone makes them sought after for high-value loans, typically more reliable on payments. (Investor Friendly Press Release with summary of their holdings)
- Rithm Capital Corporation (Formerly New Residential Investment Corp) ($RITM) - Top-down REIT, involved in the rental of units as well as insurance, maintenance, mortgaging, etc. Diversified REIT. Recently bought out it's parent company for full control.
- Digital Realty Trust ($DLR) - Excellent REIT if you hold the sentiment that tech will grow while traditional retail shrinks. My personal doomer combo is STAG and DLR.
- Annaly Capital Management ($NLY) - 90% of exposure is to bank-backed mortage securities (Agency Mortgage Backed Securities) which can be a cause for concern. Recently announced offering of 100 Million shares @$6 each which will be 600 million in "cash," to invest in new securities. Could be good timing if acquiring during downturn. (Summary of Annaly Holdings)
- Misc Dividends
- Medtronic ($MDT): For profit medical device company that charges for training and monthly subscriptions on top of the usual gimmick. (Morningstar Analyst Fair Value is $129, on top of dividends. Currently trading at $94 08/03/22)
- Coca-Cola ($KO; For Kola nuts): One of Buffet’s favorites and a history of dividends like no other.
- UMC United Microelectronics Corporation: Like Taiwan SemiConductor, but with better fundamentals, and you can afford it.
- Blue Chips
- Certificate of Deposit (CDs): You give a bank your money, as usual, except you cannot withdraw or move it. It becomes a certificate of your deposit into the bank, and that they will give it back to you with interest at the agreed upon date.
- Issued in $1000 quantities.
- Guaranteed few % points
- Fluctuates in price (APY%)
- Usually 6-18 Month timeframes
- Short ETFs (High-Risk, Shorting major ETFs such as NASDAQ, S&P500, DJI, etc. Useful if very pessimistic short-term, can cash out when bullish again)
- Paying Down Debt
- Debt is expensive.
- Your interest payment (APR) is likely more than inflation, with many being 16-24%. So even if "your dollar is becoming worthless," it's not doing so at a rate comparable to your APR.
- Paying down debt improves your credit, which will help if things get worse. Improving your credit score now means when you do have to access your credit, you will have better rates and higher limits.
Dividend stocks: whether stocks with lower dividends and higher price upside or high dividends with less price upside, get yourself some. Tech and comms are good for the former, REITs and financial institutions better for the latter.
Certificates of Deposits (CDs) are good if looking for lower return with near-zero risk, excellent if expecting a widespread downturn.
Shorting Index Funds: Bet short term that price of the index will go down. High-risk, high reward. Think in and out versus long term hold.
Paying Down Debt: Owe less, so you can have more if your situation calls for it down the line.
Not financial advice, lick my balls, I hold some of these stocks, etc.