Yes, the economy is in the toilet. Fortunately for you, there are a few easy ways to "recession-proof" your portfolio. For instance, you can invest in so-called "sin" stocks. These include alcohol stocks, tobacco stocks, gambling stocks, etc.
The reason is simple: When times get tough, people still smoke, drink alcohol, and gamble. And some take up smoking, drinking, gambling, etc., as a way to cope. So investing in those stocks can provide stable returns, even under difficult economic conditions.
You still need to be prudent in your investing, and picking industry-leading "sin" companies is a good start. Some investors may exclude these types of investments from a moral standpoint, and that is understandable. But if you’re willing to bet on others’ bad habits, these stocks can give your portfolio diversity.
Two of my favorites are U.S. Tobacco (UST) and Anheuser Busch (BUD). Both are strong companies with strong brand loyalty that can see them through a bleak economy.
[Ed. Note: Rick Pendergraft is a professional trader and market analyst. In Rick's new investment service, he gives easy-to-follow, step-by-step advice that you can use to create consistent, automated income. Learn more about how he can help you produce explosive gains - no matter which way the market is trading - by clicking here.]
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