As the US increasingly faces the prospect of heading into a recession one sector that investors gravitate to is consumer staples.
The logic is that consumers still need to buy certain products, but that they will gravitate towards stores targeting the lower budgeted consumer. Companies like Coca-Cola for instance tend to do well because most consumers can still spare some disposable income for a relatively inexpensive purchase like a bottle of coke.
Coca-Cola has some pretty strong seasonals coming up. Over the last 25 years the share price has risen 80% of the time between April 02 and May 30. The maximum gain was 14.26% in 1999 and the largest loss was -6.51% in 2010.
So, is a recession always a good time to grab some coke shares?
Major Trade Risks:
The major trade risk here is that some negative stock news impacts Coca-Cola’s share price
Remember, don’t just trade it, but Seasonax it!