Amazing “Recession Proof” Investment
In today’s market notes, we take a look at a “big idea” introduced by our good friend Tom Dyson (now of The Palm Beach Letter) and say, “Well played, sir.”
More than three years ago, Tom introduced DailyWealth readers to the idea of buying McDonald’s and Wal-Mart to “recession proof” your stock portfolio.
Both McDonald’s and Wal-Mart are strong businesses that treat their shareholders well with steady dividends. In a recession, folks are more likely to shop at Wal-Mart than Nordstrom. And they’re more likely to pass on $50 steak dinners… while sticking with simple pleasures like $2 hamburgers.
Our chart below shows how Tom was right on. It displays the past three years of trading in shares of McDonald’s. As you can see, despite the great credit crash of 2008… the recession of 2009… the “flash crash” of April 2010… and last month’s “mini-panic,” McDonald’s has steadily advanced to a new all-time high… while paying out ever-increasing dividends. Like Phillip Morris, what McDonald’s does “ain’t pretty”… but it works.