SPECIAL REPORT The Top 7 Stocks for 2024

3 Investments to Make to Protect Your Wealth in a Downturn

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  • Savvy investors count on these three stocks despite economic turbulence.
  • Coca-Cola (NYSE:KO): The soft drink manufacturer owns the brand power to thrive in tough economic times.
  • ASML (NASDAQ:ASML): This semiconductor maker continues to benefit from increased technological innovations.
  • British American Tobacco (NYSE:BTI): The tobacco giant boasts sturdy margins and an expansion mindset into growth opportunities.
investments to protect your wealth - 3 Investments to Make to Protect Your Wealth in a Downturn

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Macroeconomic conditions are starting to show cracks, so investing during a downturn can be daunting. Taking a long-term position in quality companies is a smart way ensure you’re protecting and growing your wealth. 

Never underestimate the power of branding. When the economic chips are down, people will pay more for a known and trusted name.

Essentially, choosing companies that offer growth over the next decade will be the investments to protect your wealth. Of course, tech is a hot sector, steadily emerging over the past few decades. And, if a recession comes, companies will surely be looking to do more with less. Technology absolutely facilitates this.

Finally, it makes sense to look for dividends. When earnings are disappointing, dividends can sometimes make the wait for a rebound a little bit more palatable. Remember not all dividends are created equally. A strong balance sheet and healthy cash flow are necessary to keep the dividend payments coming. So, let’s explore three stocks that can protect your future wealth.

Coca-Cola (KO)

The website for Coca-Cola Consolidated (COKE) displayed on a smartphone screen.
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Coca-Cola (NYSE:KO) is one of the most recognizable brands on the planet. Not only is the group surviving a tough economic environment, it’s thriving. Recently, the company upgraded its full year revenue and profit expectations. 

Coca-Cola has phenomenal brand power and an enviable business model. Additionally, KO outsources its bottling, allowing it to keep costs low and focus on selling high-margin syrups. 

Coca-Cola is best know for it’s namesake soft drink, but a slew of acquisitions has expanded its portfolio offering an enticing degree of diversity. The company holds a strong position to deliver for investors even if conditions worsen. It remains a strong pick for cautious, long-term investors.

ASML (ASML)

Closeup of mobile phone screen with ASML logo on computer keyboard
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ASML (NASDAQ:ASML) is your best bet if you’re looking for semiconductor investments to protect your wealth. They say it wasn’t the miners who got rich during the California Gold Rush, but rather those who were selling the picks and shovels. ASML fits into that category, with one-of-a-kind lithography machines needed to make advance semiconductors. 

The biggest challenge for ASML’s growth is its capacity to meet demand. The company expects to more than double its sales and grow its margins considerably over the next few years. It’s an ambition that’s possible, but has left some investors doubtful considering the challenges the market has been facing recently. 

However, the semiconductor slowdown is likely to be a blip on the radar. The chips are necessary as we continue to increase connectivity. Bumps along the road have brought ASML’s valuation down considerably. Now is a great entry point for long-term investors. 

British American Tobacco (BTI)

British American Tobacco logo on a building
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Dividend stocks are must-have investments because they endure through low periods. British American Tobacco (NYSE:BTI), with its 9.3% dividend yield, absolutely meets that criteria.

BTI’s impressive operating margins show room to maneuver, despite a declining industry. Also, it has growth opportunities within emerging markets and new categories such as vapes and heated tobacco. This is an essential pivot as traditional cigarettes are less and less popular.

The firm’s payout ratio is 65%, suggesting no imminent threat of a dividend cut. Additionally, its strong brand power should continue to command strong margins. 

Notably, the tobacco industry is a controversial sector. This impacts BTI’s value, but so far has done little to dull its shine as a strong choice among investments to protect long-term wealth. 

On the date of publication, Marie Brodbeck held BTI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marie Brodbeck has a Finance degree from Duquesne University and has been a financial journalist for more than a decade. Her work can be seen in a variety of publications including InvestorPlace, Benzinga, Yahoo Finance and CCN.


Article printed from InvestorPlace Media, https://investorplace.com/2023/11/3-investments-to-make-to-protect-your-wealth-in-a-downturn/.

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