Defensive Plays Outshining Risky Assets, Gold is Part of the Mix Larson July

It might not sound exciting, but a defensive investment plan is well-suited to today’s markets.

That’s according to Mike Larson, senior editor of the Safe Money Report at Weiss Ratings. Speaking to the Investing News Network at the Rule Symposium, he explained why he recommends this mindset.

“I’m still advocating a defensive (strategy) — what I call the ‘safe money approach’ to investing,” he said. “Dividends, stability, boring companies even, if you will. That’s what has been doing very well relative to the riskier stuff, and I think it’s going to continue to do so for the rest of this year, and heading into 2023.”

Larson sees gold as part of that mix, and noted that a key obstacle for the metal will likely soon be removed.

“If the market starts to perceive that the (US Federal Reserve) is going to have to backtrack soon at the same time as some other countries are still going to have to get their rates up off the floor, that’s going to take some of the wind out of the sails for the US dollar, and that’s going to remove that big headwind,” he commented.

In terms of when the Fed may reverse course, Larson said he sees that happening heading into 2023.

“I think the Fed will go further than it might have in the past couple of cycles, because the inflation numbers are so bad,” he said, noting that fighting inflation is tougher than it has been in the past. But by early next year, factors like rising unemployment and slower consumer spending will push the central bank to backtrack.

In his view, the debate around whether the US is in a recession doesn’t make much sense — the traditional definition (two consecutive quarters of declining GDP) now applies, and even if that’s ignored the economy will meet other broader recession characteristics as the year continues.

Watch the interview above for more from Larson, and click here for the full Rule Symposium playlist on YouTube.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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