I really like Exxon Mobil (XOM) for a lot of reasons. I think they are a good play for a recession and for growth. There some great factors that go into this from my perspective. I think this is a good stock to invest in for the current climate and for future gains.
The main reason is because they are in oil. I don’t know of any major oil company that has not grown over time. They will certainly do well, even with adapting to the current energy climate. This company is forward looking and will make appropriate adjustments to meet the future head on. They have the right investing strategy for future growth.
They proved this by going in to natural gas, the next major energy source for the new generation. They just bought XTO Energy, a major gas company to make preparations for this new future. It was also a diversification play.
This was a brilliant investment and will certainly pay off. The new method of drilling from hydro-fracturing shale is adding to the world’s supply. This is encouraging technologies toward using natural gas.
On top of that, the nuclear power generation industry is seriously at risk. This is mostly due to the disaster in Japan which showed the major vulnerabilities of nuclear energy. Natural gas is the logical alternative to nuclear power. It is cleaner than coal and not as dangerous as nuclear.
In addition, Exxon Mobil has very stong financials. So they are good to go for a long time coming. Their cash flow is good and getting better. They have also discovered a ton of new reserves in the Gulf of Mexico. It’s not a very popular place to drill for oil right now because of the BP disaster, but they found it nonetheless and will profit from it.
Good Stocks for Defensive Plays
Defensive plays in the stock market are when you see a recession or a correction coming. That means in the midst of a rising market with strong rallies, you start to see a downturn for whatever reason. Here are some good stock investments in times of recession or market correction. Investing is risky so get advice from a professional before going ahead with any plan.
Whenever you do see a downturn coming, you will want to evaluate your investment strategy to adjust for the coming changes. You will want to first take a look at where the greatest risk exposure is coming from. Some call this asset allocation, but you need to do this within your stocks as well.
Good stocks for recessions and economic downturns are things like consumer staples. These are the grocery stores, household goods and the like. Basically, these are things that people will need no matter what the economy is doing. People still need to eat and buy toilet paper, even if they can’t find jobs.
Another set of stocks that is good is healthcare. Again, people need this even when there is a downturn. In addition, the cost of healthcare is constantly rising, which is telling you that someone is making money from it. With this new reform bill, this sector is here to stay as a great defensive play for the long term.
Utilities are good too. They tend to be very strong financially. They don’t lose much business as it were in a recession. They continue to pay out dividends throughout. Plus, our energy consumption is only rising and does not ebb with the economy.
These are stocks you want to rotate into when you smell a correction coming. Don’t be passive and wait for it to come. Make these moves quickly as you see them approaching.
Best Stocks for Economic Recovery and Upturns
Many investors have been living inside the recession climate for so many years that they may have forgotten how to play strength. That’s not to say we are in a strong recovery or anything like that. In fact, people are debating whether we are going to see a double dip recession. In any case, I don’t think that is the situation right now. Accordingly, investors should be trying to find good stocks to buy for an economic upturn. I think it will be slow and gradual, but it’s not too early to start looking.
For starters, I would look at luxury goods companies. They take the biggest hit during a downturn. I’m not suggesting companies like these because the economy is coming back to a place where consumers in the US can buy these like they used to.
I’m mostly suggesting it because there is a fast rising wealthy class in emerging market countries like China and India. Most of these companies do not have domestic luxury companies yet. So they will buy from American or European companies like Tiffany’s, Jimmy Choo and Gulfstream. Whenever you get advice on how to invest in stocks during a recovery, most people will point to luxury items.
Commodities are also very good for upturns as well. As the world economy begins to grow and businesses start to invest in expansion, they will need raw materials and energy to fuel that growth. That is why in an economic recovery, commodities like oil and copper are the first to go up and rally in price.
Other stocks that are profitable are those that deal in discretionary consumer goods. These would be things like electronics, televisions, laptops and other things that people don’t need to live day to day. Be on the lookout for these stocks when you think things are looking bright on the economic front.