Amazon founder and executive chairman Jeff Bezos is sounding the alarm.
In an interview with CNN, Bezos says the economy “doesn’t look good right now.”
“Things are slowing down. You see layoffs in many sectors of the economy. “
And that means you may need to tighten your budget.
“If you are someone who is thinking about buying a big screen TV, you might want to wait, hold on to your money, and see what happens,” advises the millionaire. “The same goes for a new car, a refrigerator, or anything else. Just take some risk out of the equation. “
That’s not a good sign for investors.
But not all businesses are created equal. Others – such as the three listed below – can perform well even if the economy collapses.
The utility sector includes companies that provide electricity, water, natural gas and other essential services to homes and businesses.
This sector is not exciting, but it is recession-proof: No matter what happens to the economy, people still need to heat their homes in the winter and turn on the lights at night.
High barriers to entry protect the profits of existing utility companies. Building the infrastructure needed to deliver gas, water, or electricity is expensive, and the industry is heavily regulated by the government.
Thanks to the recurring nature of the business, the sector is also known for paying reliable dividends.
If you’re looking for the best utility stocks, names in the Utility Select Sector SPDR Fund (XLU) provide a good starting point for further research.
Health care serves as a prime example of a defense sector because of its lack of correlation with economic ups and downs.
At the same time, this sector offers long-term growth potential due to the favorable conditions of the population – especially the elderly – and many innovations.
Average investors may find it difficult to pick a specific health care stock. But health care ETFs can provide a different and more profitable way to gain real estate exposure.
Read more: Trading while the market is down: Here are the best investment tools to jump on ‘once in a generation’ opportunities (even if you’re a beginner)
The Vanguard Health Care ETF (VHT) gives investors broad exposure to the health care sector.
To tap into specific sectors in health care, investors can look at names like the iShares Biotechnology ETF (IBB) and the iShares US Medical Devices ETF (IHI).
It may seem counterintuitive to own real estate on this list.
While it’s true that mortgages are on the rise, real estate has proven resilient in times of rising interest rates, according to investment management company Invesco.
“Between 1978 and 2021, there were 10 separate years in which the Federal Funds rate went up,” Invesco said. “Over the 10 years identified, US private housing has outperformed stocks and bonds by seven times and US public housing has outperformed six times.”
Well-chosen properties can offer more than just value. Investors also get a steady stream of rental income.
But you don’t have to be a landlord to start investing in real estate. There are many real estate investment trusts (REITs) and crowdfunding platforms where you can get started as a real estate mogul.
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This article provides information only and should not be considered advice. Offered without warranty of any kind.