Hedge Your Portfolio With this Recession-Resistant Giant

Investors remain concerned about a slowing economy. Inflation and unemployment have risen in recent weeks. While still off their highs from the past few years, it’s possible that the economy could slide further, even into a recession.

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  • For that scenario, investors don’t need to cash out or go to bonds, where they may still get hit by rising interest rates. Rather, it makes more sense to buy an industry leader with a track record of holding its value in a recession.

    That company is Walmart (WMT). The retailer was one of two companies in the Dow to post gains in 2008. And they held up well in 2020, in part from a rise in online shopping.

    Today, Walmart’s CEO feels “pretty good” about U.S. consumers. When the economy is fine, consumers spend more. When the economy contracts, consumers tend to cut back, and shop more at the lowest-price offerings – which is often Walmart.

    Action to take: Shares have performed better than the S&P 500 so far this year, a trend likely to continue, even with shares near their 52-week high. Today’s buyers can get a 1.4 percent dividend, with a history of growth over time.

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  • For traders, the uptrend in shares is likely to continue. The January 2024 $170 calls, last going for about $4.60, could deliver mid-double-digit gains in the months ahead.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.