Recession Cushion
l@sasacul123
+4.1%
since Oct 8
The idea
I think a recession is coming but I have no idea when, so this is built to hold up rather than call the timing. Long-dated Treasuries and TIPS are there for when rate-hike bets flip to rate cuts, and gold covers the scenario where inflation stays sticky through the slowdown. The stock side leans on utilities, healthcare, and everyday-spending names people keep paying for no matter what. I'm keeping 15% in cash to soften drops and have room to buy if things get cheap, and I avoid single-stock bets in favor of spreading risk across names in each group.
What it owns
- Long-dated government bonds typically rise in price when economic weakness prompts the Federal Reserve to shift from raising rates to cutting them. · iShares 20+ Year Treasury Bond ETFLong-duration Treasury bonds appreciate when traders shift from expecting rate increases to expecting rate cuts as economic data weakens., iShares 7-10 Year Treasury Bond ETFIntermediate-term Treasury bonds gain when rate-cut expectations return, with less volatility than longer-dated bonds, helping stabilize this take during equity stress., iShares TIPS Bond ETFThese inflation-adjusted Treasury bonds protect against scenarios where economic growth slows while price inflation persists.23%
- Consumers continue purchasing essential goods like groceries, household products and basics during economic slowdowns, and discount retailers often gain market share. · WalmartConsumers shift spending toward discount retailers when budgets tighten, making Walmart a beneficiary of economic weakness and changing shopping habits., Procter & GambleConsumers buy toothpaste, detergent, diapers and other household staples in all economic conditions, and Procter & Gamble owns the leading brands in these categories., Costco WholesaleCostco generates most earnings from membership fees, which customers renew because buying in bulk saves money when household budgets come under pressure., Dollar GeneralDollar General's customer base seeks affordable goods, and the store often gains traffic when household budgets become constrained., Coca-ColaCoca-Cola sells affordable beverages globally that consumers continue purchasing during economic downturns and recessions., Waste ManagementWaste Management collects trash under long-term contracts with built-in price increases, generating revenue independent of economic conditions.23%
- Electricity and water utilities collect steady revenue from regulated customers regardless of economic conditions, and benefit when interest rates fall. · Southern CompanySouthern Company generates regulated utility revenue that remains stable regardless of broader economic activity, and benefits when interest rates decline., Duke EnergyDuke Energy collects steady fees for electricity delivery under regulatory oversight, keeping earnings stable when economic activity slows., American Electric PowerAmerican Electric Power owns regulated transmission and distribution networks that generate predictable returns regardless of economic growth., WEC Energy GroupWEC Energy operates regulated Midwest utilities with stable earnings that move independently from economic cycles.14%
- Demand for prescription drugs and medical procedures remains relatively stable even when the broader economy contracts. · Johnson & JohnsonPeople continue taking prescribed medications and undergoing necessary surgeries during recessions, sustaining demand for pharmaceuticals and medical devices., AbbVieThe company's drugs treat serious chronic conditions that patients cannot postpone, and its dividend is supported by cash generation during downturns., McKessonMcKesson distributes the majority of prescription drugs filled in the country, earning a fee per transaction that persists through economic cycles.13%
- Gold tends to preserve value during economic downturns and periods of persistent inflation, providing protection when other assets decline. · SPDR Gold SharesGold holds its value during equity market declines and inflationary periods, serving as insurance when traditional bonds may not provide cushion., Agnico Eagle MinesA lower-cost gold mining company generates higher profits as the price of gold rises, amplifying gains from gold price increases.12%
- Cash15%