A recession doesn’t just drop from the sky. Some signs and patterns precede this economic crisis. So, does that mean that investors like you can see always see recession approaching and prepare accordingly? Unfortunately, no. But that doesn’t mean you cannot start getting ready for it well in advance.
The current global economic landscape is a bit shaky. The U.S. recession in 2007 and 2008 and its global impact taught the world some valuable lessons. But no matter how well prepared the most significant economies are, or what measures they took to avoid another recession, the danger signs are still flashing.
The U.S. is experiencing a decrease in economic activity. Affected by the trade war, China is also suffering from decreasing growth rates, and future projections do not seem very hopeful either. Europe is already in a state of the industrial recession, and many countries are in significant debt.
For Canada, the recession alarms are not blaring yet. But the country would feel the impact if the other major economies take a hit. As of now, the housing market is slowly equalizing, unemployment rates are expected to come down soon, and wages are growing. But that doesn’t mean that the country will pass unscathed through the period of a global economic slowdown.
Even if the signs of a recession are not as clearly visible as they could be, the public perception is changing. People are afraid of another recession and are preparing as best as they can to weather the economic crisis. What can you do about it?
One of the safety measures you can take to prepare for a market crash is to invest in a safe stock. Investing in a reliable stock makes for an investment that can suffer through the harsh recession. One such stock is Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP).
Brookfield infrastructure invests in electrical lines, pipelines, transportation and roads. The company buys in infrastructure and utility companies that operate these utilities and has bought into several such companies throughout the globe — tying its money to the necessities that will continue operating irrelevant to the economic condition.
Brookfield Infrastructure has a recession-resistant business model, making it a very safe investment avenue in these troubled times.
The company has a market capitalization of $18.76 billion. The current market value per share is $63.95, which has seen steady growth for the past five years. Brookfield Infrastructure also gives quarterly dividends to its investors, which it has only increased since the payout started in 2009 — 11 years of growing dividends.
The company’s core strength is its investment portfolio, which is diverse, both globally and asset-wise. Returns are consistent since more than 90% of the company’s revenue comes from contracted and regulated sources.
Many experts in the market believe that even if we might not see a full-blown recession yet, a slowdown might be imminent. So, even if it’s not the time to sell everything right away, this Fool thinks it might be the time to purchase some safe stocks. Brookfield Infrastructure might be a very strong candidate for your recession-ready investment portfolio.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Adam Othman has no position in any of the stocks mentioned.