22 Recession Resistant Stocks to Add to Your Portfolio in 2023

 

Social media was buzzing with recession related conversation in 2022. Recession fears continue to loom large, but the global economy has worked hard to thwart the threat. Although global economic growth is expected to decelerate in 2023, the prediction has been raised from 2.7% to 2.9% by IMF. This is projected to accelerate again in 2024. As a trader or investor, it is still a good idea to diversify your portfolio to protect it against any slump in the global economy. The so-called recession-resistant industries have historically weathered these storms much better than others. They are also called defensive industries or stocks, as they help shield your investment portfolio from sudden and sharp downturns.

So, here’s a look at industries and stocks that are widely considered recession resistant.

A. Consumer Staples

Even when consumers tighten their budgets, they still spend on basic necessities, like groceries, household cleaning products, and toiletries. Among the most prominent consumer staple stocks are:

 

 

B. Healthcare

During a challenging economic climate, people tend to work harder to hold onto their jobs. They may increase their spending on healthcare. Negative sentiment may also encourage people to spend more on insurance.

 

C. Gold and Gold Mining Firms

Gold, in different forms, is considered the world’s most popular defensive asset class. It is said to be a “safe-haven” asset, which tends to spike sharply amid economic and political uncertainties. You can add exposure to this yellow metal by trading gold CFDs or adding gold mining stocks to your portfolio.

 

D. Utilities

Utilities are necessities that people continue to spend on. These sectors also benefit from government support and subsidies during economic slowdowns, which gives them an extra layer of protection.

 

E. Feel-Good Products

Although this is not an industry, billions of dollars are spent every year on products that accompany our celebrations and make us feel good. These include energy drinks, other beverages, snacks, and cosmetics.

 

F. Lessons from the Pandemic

During economic hardships, companies tend to spend on technology to reduce costs. The global cloud computing market, estimated at $360 billion in 2022, is expected to reach $629 billion by 2028, representing a CAGR of 27.3%.

 

1. Cloud Computing

• Amazon – Tech giant focusing on ecommerce, cloud computing, digital streaming, and AI.
• Microsoft – Tech behemoth providing cloud computing and software products.

Also, being on a budget discourages people from eating out and traveling for vacations. They spend more time at home, a trend that boosted the revenues of certain companies during the pandemic.

 

2. Videogames, Metaverse & Social Media

• Activision Blizzard
• Meta Platforms

 

3. Streaming Services

• Disney
• Netflix

 

4. Search Engines

• Google
• Baidu

Although these were not traditionally considered recession-resistant stocks, experts believe these companies could outperform the market in case of a major slowdown.

Key Takeaways

• A recession may not be around the corner in 2023. However, a well-diversified portfolio is a good risk management technique.
• Consumers continue to spend on necessities even during a recession.
• Defensive stocks have historically performed better than others during economic downturns.
• Consumer staples, healthcare, personal care, utilities, and feel-good products could continue to see relatively stable demand.

 

*All statistics on this page can be found at https://finance.yahoo.com/

 

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