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MarketWatch: 3 Shutdown-Proof Investments to Buy Now

MarketWatch: 3 Shutdown-Proof Investments to Buy Now

By    |   Friday, 18 January 2019 01:39 PM

With all of the confusion, uncertainty and anger the government shutdown is causing, MarketWatch recently offered a few ways to actually make money amid the political chaos.

“Unfortunately, there doesn’t seem to be any end of this record-long shutdown in sight. And even if a short-term bill manages to provide funding, history shows these fights are a regular occurrence and another shutdown is far more likely than a long-term solution,” MarketWatch explained.

“While admittedly there are no stocks 100% tied to U.S. federal spending trends, there are several trades that are likely to do well even in the event of another funding lapse — and several obvious victims suffering headwinds amid the political infighting,” MarketWatch’s Jeff Reeves explained.

His trio of picks to buy right now:

Senior Housing REITs: “Thanks to a failed Obamacare repeal in 2017 and dissension from far-right legislators derailing then-House Speaker Paul Ryan’s plans for a Medicare overhaul, it has become clear that any hope of a coordinated GOP effort to alter reimbursement rates to senior housing facilities is just not going to happen. Given attractive valuations now that priced in those prior challenges, the time may be right for senior housing.” MarketWatch suggested stocks like National Health Investors (NHI) and Welltower Inc. (WELL). However, investors are urged to avoid the rest of housing.

Defense Stocks: “That the fiscal 2018 federal budget saw dramatic cuts at several government agencies but a massive increase in military spending tells you everything you need to know about Republican priorities through 2020. And while the bulk of the gains for defense stocks were logged in 2017, including a massive 88% gain for Boeing BA, -0.05% it may be worth giving this sector another look.” MarketWatch urges you to avoid "enterprise tech: stocks and "midcap tech stocks that have a few lucrative federal contracts but may not be able to secure new deals or win new business as a result of the shutdown," such as cybersecurity firm ForeScout (FSCT).

Gun and Firearms Stocks. “It’s a sad commentary, but publicly traded gun companies are increasingly looking attractive amid a government shutdown. That’s because firearm marketers can do a brisk business with the political football caused by divided government right now. When there’s chaos in the government, what’s more comforting than a warm gun? When Democrats hold power in Congress, what’s more compelling than a hysterical ad claiming Nancy Pelosi is coming to get your guns?” MarketWatch suggests Sturm Ruger & Company (RGR), Vista Outdoor (VSTO) and American Outdoor Brands (AOBC).

Meanwhile, after tax cuts, rising incomes and buoyant stock markets set off a consumer boom in 2018, signs are emerging that the main engine of U.S. economic growth could sputter, and a record-long government shutdown further muddies the waters.

Federal Reserve officials and many economists have long counted on continued robust consumer spending to keep the economy chugging along, despite headwinds from recent financial markets turbulence, trade conflicts and weakening global growth.

Now they fear the consumer boom could be on the cusp of a reversal, Reuters explained.

The warning signs span the income spectrum - from the well-heeled possibly cutting back after their stocks got hammered last fall, to the poor potentially getting squeezed if a lingering government shutdown delays food assistance payments.

Economists are also not certain, for example, whether last year’s personal income tax cut will lead to higher refunds and boost big-ticket purchases, such as home appliances, typical for this time of year, or whether the windfall was already spent last year when paycheck withholding declined.

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With all of the confusion, uncertainty and anger the government shutdown is causing, MarketWatch recently offered a few ways to actually make money amid the political chaos.
shutdown, proof, investments, buy
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2019-39-18
Friday, 18 January 2019 01:39 PM
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