This is a Video Guest Post by AK of Fallible
In this video, Victor Sperandeo “Trader Vic” explains some of the best ways to to trade a 2019 bear market crash.
What type of investments would be “defensive”? Which we should define as outperforming the market in times of economic slowdown?
One favorite type of investment here in the U.S especially amongst the high tax bracket crowd are municipal bonds: in 2018 when 93% of all asset classes had negative returns the S&P Muni Bond Index was up 1.35%.
Muni Bonds of course provide a tax free stream of income. And at the same time, they provide a level of safety above dividend-paying stocks, which is what playing great defense is all about…..
Another area which outperforms in turbulent times and recessions is the low cost retail space: think Walmart, DollarTree.
In fact in 2008 when people where in full panic mode and the economy crashed along with stocks. Walmart’s stock actually closed the year up 20%- a mere 58% outperformance over S&P!
And if you think that Walmart gets crowded, try walking around a Dollar Tree store… Dollartree’s stock went up 60% in 2008…
Just because Americans are broke doesn’t mean they’ll stop shopping- they just go to cheaper stores.
To learn more, make sure you watch the video above!
And as always, stay Fallible out there investors!
***All content, opinions, and commentary by Fallible is intended for general information and educational purposes only, NOT INVESTMENT ADVICE.