https://money.usnews.com/investing/investing-101/slideshows/7-ways-to-prepare-your-portfolio-for-a-recession?src=usn_invested_nlUI
To help protect your privacy, some content in this message has been blocked. To re-enable the blocked features, click here.
To always show content from this sender, click here.
U.S. News & World Report
Invested.
Advice, rankings and one great money idea every day.
How to Prepare Your Portfolio for a Recession
Feb. 15, 2019
Signs of a possible slowing global economy and the potential impact that it could have in the U.S. has some investors concerned about the next recession.
The U.S. economy hasn’t been in a recession since the last one ended in 2009. While most economists don’t see that happening in the near future, “it will happen sooner or later,” says Richard Mathes, president of The Mathes Company in New York.
Now might be the time for investors to review how resilient their portfolio would be to a U.S. recession and the steps they should take. For investors who might want to be more defensive with their holdings, here are seven investments to consider.
1. Cash. Jim Paulsen, chief investment strategist at Minneapolis-based The Leuthold Group, says while investors shouldn’t load up heavily in cash, increasing their cash holdings to slightly above their normal allocations in a recession can be a smart idea.
Recessions can generate a lot of worry, so having a strategic amount cash on hand gives investors the ability to buy favored stocks quickly that have fallen sharply in price. “You want to take advantage of other people’s fears,” he says.
2. U.S. Treasury bonds. Credit markets can be riskier in a recession, so Paulsen recommends investors stick with the high-quality bonds, such as U.S. Treasury bonds. Historically, Treasury bonds have been the best-performing asset in recessionary environments because investors see these assets as a safe haven, he says. Bonds will also give greater returns than all-cash positions, he says.
Look to extend duration, too, which means buying longer dated bonds. Many bond benchmarks have a duration around five to six years. For that reason, Paulsen says to look to buy bonds that have a longer maturity window during negative economic environments. – Debbie Carlson
Click here to continue reading.
Recommended reading on this topic:
Economists Say the Chance for a U.S. Recession Increases
7 Stocks That Soar in a Recession
9 FAQs About the Next Recession
Top Target-Date Retirement Funds
Vanguard Target Retirement Income VTINX
$15.6B
Net Assets -1.99%
1 Year Return
TIAA-CREF Lifecycle Retirement Income Fd TLRIX
$514.4M
Net Assets -3.84%
1 Year Return
MFS Lifetime Income Fund MLLAX
$556.0M
Net Assets -2.64%
1 Year Return
USAA Target Retirement Income Fund URINX
$320.3M
Net Assets -3.01%
1 Year Return
JPMorgan SmartRetirement® Income Fund JSRAX
$3.5B
Net Assets -4.70%
1 Year Return
Fidelity Advisor Freedom® Income Fund FAFAX
$220.8M
Net Assets -1.94%
1 Year Return
PIMCO RealPath™ Income Fund PTNAX
$12.4M
Net Assets -5.05%
1 Year Return
Manning & Napier Target Income Series Fd MTDIX
$125.1M
Net Assets -2.33%
1 Year Return
American Century One Choice In Ret Port ARTAX
$1.5B
Net Assets -4.34%
1 Year Return
Franklin LifeSmart™ Retirement Income Fd FTRAX
$49.3M
Net Assets -2.48%
1 Year Return
Data as of February 15th, 2019
Today's Financial Roundup
Global stocks slip. World markets were mostly lower in the absence of good news as the U.S. and China concluded yet another round of trade talks in Beijing. Wall Street was set for losses on the open. S&P 500 futures shed 0.3 percent to 2,735.00. Futures for the Dow were 0.4 percent lower at 25,327.00.
There won't be a shutdown, but Trump to declare an emergency. Congress lopsidedly approved a border security compromise that would avert a second painful government shutdown, but a new confrontation was ignited — this time over President Donald Trump's plan to bypass lawmakers and declare a national emergency to siphon billions from other federal coffers for his wall on the Mexican boundary.
How to be a smarter responsible investor. Don't forget your head when investing your heart. Being a smarter responsible investor means keeping a close eye on diversification, cost and if your responsible fund truly does align with your values, writes Coryanne Hicks for U.S. News.
Find retail stocks with big dividends. Income investing focuses on reliable payouts from companies with a stable outlook, and there are a bunch of publicly traded retail stocks with great brands and sales trends. Jeff Reeves has nine suggestions for U.S. News readers.
Amazon's exit could scare tech companies from New York. Amazon.com (ticker: AMZN) jilted New York City on Valentine's Day, scrapping plans to build a massive headquarters campus in Queens amid fierce opposition from politicians angry about nearly $3 billion in tax breaks and the company's anti-union stance. With millions of jobs and a bustling economy, New York can withstand the blow, but experts say the decision by the e-commerce giant could scare off other companies considering moving to or expanding in the city.
Unsubscribe from this email list | Manage my email preferences | Privacy Policy
1050 Thomas Jefferson St. NW, Washington, DC 20007 US
© 2019 U.S. News & World Report, L.P. All rights reserved.
Problems viewing? View it on a web page.
