According to Peter Schiff, who predicted the 2008 financial crisis, the present recession will only worsen in the third quarter. Here are his favorite safety products. Many well-known people have already forecast that the American economy will experience a recession, including Elon Musk and Suze Orman.
Peter Schiff, the CEO and chief global strategist at Euro Pacific Capital, is the most recent expert to raise the alarm. In a tweet sent out on Thursday, he stated that “the U.S. economy has been in a recession all year.”
“The recession will worsen in Q3 as a result of yesterday’s rate increase, further layoffs, and inflation that is still eroding buying power. In fact, it’s possible that Q2 GDP will be reduced much lower.
The Bureau of Economic Analysis’s preliminary estimate indicates that the U.S. GDP decreased in Q2 at an annual pace of 0.9 percent.
Schiff is also knowledgeable on how to get ready for a downturn. In fact, that trend is quite apparent in the most recent 13F filing by Euro Pacific Asset Management with the Securities Exchange Commission.
Avoid missing Gold
The golden metal has long been a favorite of Schiff’s.
He once observed, “The problem with the dollar is that it has no intrinsic worth. “Gold will hold its worth, and you may always use it to purchase additional food.” He is, as always, backing up his words with deeds.
Euro Pacific Asset Management owned 409,155 shares of Agnico Eagle Mines, 335,740 shares of Newmont, and 1.645 million shares of Barrick Gold as of March 31. (AEM).
In actuality, the three largest gold mining companies made up the firm’s top three holdings, accounting for 8.0 percent, 5.4 percent, and 5.0 percent of its portfolio. Like fiat currency, gold cannot be created out of thin air, and since it is a safe haven, demand usually rises when things are uncertain.
Miners like Newmont, Barrick, and Agnico will probably make more money if gold prices rise.
Recession-resistant income stocks
Although some dividend stocks may be used as a hedge against recessions, dividend stocks are a terrific method for investors to generate a passive income stream.
A prime example is British American Tobacco (BTI), which is the fourth-largest asset in Euro Pacific and represents 4.6 percent of the portfolio. A 7 percent yearly return is desirable and is offered by the manufacturer of Kent and Dunhill cigarettes.
Philip Morris International (PM), another tobacco giant with a dividend yield of 5.2 percent, is another stock that Schiff’s fund has in excess of 160,000 shares of. Euro Pacific’s ninth-largest position, with a portfolio weighting of 3.1 percent, is the maker of Marlboro cigarettes.
Because the demand for cigarettes is so inelastic, major price adjustments only cause modest demand changes, making this market relatively resilient to economic shocks. British American and Philip Morris may be worth looking into further if you’re okay investing in so-called sin companies.
Agriculture
Agriculture is one recession-proof industry that shouldn’t be ignored when it comes to playing defense.
It’s easy. No matter what, humans still require food. Schiff talks about precious metals more than agriculture, but Euro Pacific does own 142,052 shares of fertilizer manufacturer Nutrien (NTR).
Even if the economy experiences a severe downturn, Nutrien is well-positioned as one of the top global suppliers of agricultural nutrients and services. The business achieved record net earnings of $1.4 billion in the first quarter.
In contrast to the S&P 500’s double-digit year-to-date fall, Nutrien shares are up approximately 10% in 2022. Considering the economic uncertainty in the United States, risk-averse investors may find comfort in investing in agriculture.
