Investing in three specific shares of Jeremy Grantham offers a defensive strategy against economic downturns
Going Ballistic? Not So Fast, Says Mega-Investor Grantham!
Are we out of the woods yet, buddy? Not just yet, according to billionaire investor extraordinaire, Jeremy Grantham from the Old Blighty. The 83-year-old whiz kid, famous for his dead-on predictions of financial meltdowns and the dotcom bubble, recently spilled the beans during a chat on the "We Study Billionaires" podcast. He's got this bear market vibe still lingering, babes, and we can't ignore it.
Now, despite those terrifying red numbers littering the indices, there was hardly a collective meltdown of investors in the first half of the year. No major panic sales, just some moderate losses for corporations and indices, thank you very much.
Grantham's predicting a whopping 50% dip in the S&P 500 in the coming months. So, what should investors do to survive the storm? Take a peek at Grantham's GMO equity portfolio, assembled to safeguard the wealth of the big-time players like him, to get inspiration. Here are three weapons in his arsenal that might just save your hide:
Johnson & Johnson
The US pharmaceutical titan might be one of the strongest fortresses in the healthcare sector. With its gargantuan size, cheddar reserves, and multiple subsidiaries, Johnson & Johnson is more than just a household name; it's a global colossus. But is it a wise investment, sweetheart? Absolutely!
Johnson & Johnson is a profit beast! Despite its gargantuan size, the company continues to pump out larger annual profits, with its products proudly displayed in every pharmacy across the globe. Plus, Johnson & Johnson boasts a membership in the dividend aristocrats and currently hands out 2.7% to its shareholders in dividends. Even in the last few months of mayhem, Johnson & Johnson held its own and suffered a mere 5% blow.
US Bancorp
When the going gets tough, the smart money piles into banks, and US Bancorp, the parent company of U.S. Bank, is no exception. Life for banks can get tough with those pesky low-interest rates, but not anymore! Higher interest rates mean fatter profits for banks, especially in the credit and credit card game.
Coca-Cola
Last but certainly not least on our list of badass stocks is the eternal value champion, Coca-Cola. A favorite of investment gurus like Warren Buffett and a heavyweight in the consumer staples sector, Coca-Cola enjoys worldwide fame for its brand portfolio and strong market position, particularly in the water business.
What makes Coca-Cola a true gem is its unwavering dividend yield, uncut for decades. Investors are currently treated to a 2.8% return on their investment. These defensive stocks with dividends could just be the perfect tools for navigating those uncertain times and delivering stellar performance in the face of a deep red market.
Here's what Jeremy Grantham, the renowned investor, suggests for surviving the predicted financial storm:
- Johnson & Johnson, the global pharmaceutical colossus, is a potential investment that continues to thrive and offer dividends despite its size.
- In times of trouble, smart money often flow towards banks, such as US Bancorp, which could see an increase in profits due to higher interest rates.
