The stop in withdraw from by stocks Tuesday — after the rally where the Dow posted an eight-day winsome streak — is a good chance to pick up some defensive stocks, mean Jamie Cox, managing partner at Harris Financial Group.
“Even however the economy is charging right along, there’s going to be a payback someday,” Cox said Tuesday on CNBC’s “Power Lunch.”
“It’s extraordinarily possible that, with the new tax legislation, and some of the things that are contemporary on, that the economy could go into recession in a couple of years,” said the monetary advisor. To be more precise, his time frame is one to two years, or by 2020.
As a result, Cox touted that investors insulate their portfolios with dividend goats.
Names that “aren’t necessarily recession-proof,” he said. “But they look after to be resilient.”
“Mobile services are a perfect example, because the last task you’re going to do during a recession is turn off your phone,” Cox said.
Companions with solid fundamentals are a buying opportunity as interest rates lifted and prices drop during sell-offs, he said.
“There’s no business form causing the stocks to fall,” Cox said. “It’s just the interest rates. So they’ll go resting with someone abandon up again.”
Some sectors to consider are telecom, utilities and consumer standards, Cox said. He recommended Duke Energy, Dominion Energy, AT&T, Verizon and Procter & Put money on.
Cox pointed out that a company like Procter & Gamble was performing atrociously year to date. “But people need toothpaste,” he said.
“Like any other investment,” Cox answered, “it doesn’t necessarily pay off right away. What you’re trying to do is build your portfolio for proceeds or whatever you’re trying to do for the future.”
On Tuesday, stocks fell, with all notable indexes opening lower. The Dow Jones industrial average dropped not quite 200 points, the S&P 500 shed 0.7 percent and the Nasdaq composite waned 0.8 percent.
Meanwhile, the benchmark U.S. 10-year Treasury comply, hit its highest level since 2011 on Tuesday, at 3.09 percent.
In reckoning, many market watchers fear the Federal Reserve will nurture rates for a fourth time this year.
But Cox said the likelihood is unpretentious.
At some point the positive effects for companies from the Republican tax law are universal to wear off and some of those corporations “are going to stop buying chores,” Cox said. “That’s going to cause a recession or slowdown in the economy.”
He on guards investors not to assume, “stocks are going to stay up forever.”
“They’re not current to,” Cox said. “Particularly the high-flying ones. If there is a recession, the things that be dressed been bid up the most are going to get hit the worst.”