I am not enthusiastic about the state of the economy. Then again, I haven’t been impressed by the weak recovery off the financial-crisis lows, either. It’s just that seeing Q1’s GDP come in at -2.9% — which everyone is blaming on the weather, as if we never have weather — makes me think this is not a one-time thing. That’s a huge decline.
Taken in concert with other data — such as terrible Q1 retail numbers, weak comps at rent-to-own stores, and an increasingly bleak labor force participation rate — I suspect we have hit critical mass and are about to enter another recession.
Recessions are not historically good for stocks. I think a terrible number on July 30, when the BEA issues its first advance estimate for Q2, is a day to be ready on move into some recession-resistant investments. Generally speaking, I prefer things like hard assets in recessions. They tend not to get hit as badly, and recover more quickly. I also prefer ETFs because they offer diversification and can smooth out volatility in your portfolio.
Here are a few suggestions.