Jeremy Grantham warns the S&P 500 will likely plunge another 40% minimum here are 3 shockproof stocks in his portfolio to help limit the pain<\/p>\n
With stocks pulling back substantially from earlier highs, some say that the market could reach a bottom soon. But according to legendary investor Jeremy Grantham, thats not going to be the case.<\/p>\n
In a recent interview with CNBC, Grantham predicts that the market tumble is far from being done.<\/p>\n
The other day, we were down 19.9% on the S&P 500, and about 27% on the Nasdaq. At a minimum, we are likely to do twice that. If we're unlucky which is quite possible we would do three legs like that, he says.<\/p>\n
Thats a scary picture. A lot of stocks are already in correction territory. If the market continues to plunge, many investors portfolios will be deep in the red.<\/p>\n
We should be in some sort of recession fairly quickly, and profit margins from a real peak have a long way that they can decline.<\/p>\n
Grantham is the co-founder and investment chief at asset management firm Grantham, Mayo, & van Otterloo. Given his gloomy forecast, lets take a look at a few safe haven stocks in GMOs portfolio.<\/p>\n
Coca-Cola is a classic example of a recession-resistant business. Whether the economy is booming or struggling, a can of Coke is affordable for most people.<\/p>\n
The companys entrenched market position, massive scale, and portfolio of iconic brands including names like Sprite, Fresca, Dasani and Smartwater give it plenty of pricing power.<\/p>\n
Add solid geographic diversification its products are sold in more than 200 countries and territories around the globe and its clear that Coca-Cola can thrive through thick and thin. After all, the company went public more than 100 years ago.<\/p>\n
More impressively, Coca-Cola has increased its dividend for 60 consecutive years. The stock currently yields 2.7%.<\/p>\n
According to GMOs latest 13F filing to the SEC, the asset manager owned 9.41 million shares of Coca-Cola at the end of March, valued at $583.5 million.<\/p>\n
With deeply entrenched positions in consumer health, pharmaceuticals and medical devices markets, healthcare giant Johnson & Johnson has delivered consistent returns to investors throughout economic cycles.<\/p>\n
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Many of the companys consumer health brands such as Tylenol, Band-Aid, and Listerine are household names. In total, JNJ has 29 products each capable of generating over $1 billion in annual sales.<\/p>\n
Not only does Johnson & Johnson post recurring annual profits, but it also grows them consistently: Over the past 20 years, Johnson & Johnsons adjusted earnings have increased at an average annual rate of 8%.<\/p>\n
The stock has been trending up for decades. And it is demonstrating its resilience again in 2022: While the broad market has declined quite a bit, JNJ is up 2.7% year to date.<\/p>\n
JNJ announced its 60th consecutive annual dividend increase in April and now yields 2.6%.<\/p>\n
As of Mar. 31, GMO held 2.58 million shares of JNJ, worth approximately $457.2 million at the time.<\/p>\n
Rounding out the list is U.S. Bancorp, the parent company of U.S. bank and one of the largest banking institutions in the country.<\/p>\n
The banking industry isnt quite as shockproof as consumer staples or healthcare. But interest rates are on the rise, and that could serve as a tailwind for banks.<\/p>\n
Banks lend money out at higher interest rates than they borrow, pocketing the difference. As interest rates increase, the spread earned by banks widens.<\/p>\n
To tame spiking inflation, the Fed raised its benchmark interest rates by 50 basis points on May 4, marking the first half-point increase since 2000. Similar moves are expected to occur at the Feds upcoming meetings in June and July.<\/p>\n
U.S. Bancorp has a strong focus on asset quality. In Q1, net loan charge-offs declined 52% year over year.<\/p>\n
Last summer, the bank increased its quarterly cash dividend from 42 cents to 46 cents per share. At the current share price, the company yields a generous 3.5%.<\/p>\n
At the end of March, Granthams asset management firm owned $520.5 million worth of U.S. Bancorp.<\/p>\n
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n
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Jeremy Grantham warns the S&P 500 will likely plunge another 40% minimum here are 3 shockproof stocks in his portfolio to help limit the pain - Yahoo...<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Jeremy Grantham warns the S&P 500 will likely plunge another 40% minimum here are 3 shockproof stocks in his portfolio to help limit the pain With stocks pulling back substantially from earlier highs, some say that the market could reach a bottom soon. But according to legendary investor Jeremy Grantham, thats not going to be the case. In a recent interview with CNBC, Grantham predicts that the market tumble is far from being done Continue reading