The Next Recession
The global economy looks shakier now than at any point since the Great Recession. There is turmoil across the globe – both political and economic.
What’s even more troublesome is that central banks have not yet ‘reloaded’ from the Great Recession of 2007 to 2009, and the recent struggles of the Euro zone. Interest rates are still near historical lows, the central banks of China and Japan are actively buying stocks (if this isn’t irrational bubble behavior, I don’t know what is), and inflation is ravaging many currencies around the world. It is hard to think that more ‘quantitative easing’ will really pull us out of another recession.
If things do continue to get worse – you can do much worse than have your money invested in the world’s largest discount retailer. In 2008, The S&P 500 fell 37.0%… Wal-Mart stock gained 21.6% due to higher earnings and an influx of investors fleeing to one of the only businesses that was still thriving.
Wal-Mart’s recent sell-off from its earnings miss gives investors another chance to load up on one of the world’s most recession resistant stocks.
It is a fool’s errand to predict when the next recession will occur. An analysis of current macroeconomic events points to a recession happening sooner rather than later, but things could always change.
With Wal-Mart Stores, Inc. (NYSE:WMT), investors can hedge for a recession while still owning a businesses that has paid increasing dividends for over 4 decades.
I don’t know when the next recession will occur. Whether it does or not, I feel very comfortable holding shares of Wal-Mart – especially with a 3.0% dividend yield and a price-to-earnings ratio of just 13.4.