Regardless of investment style, everyone should have a few safe investments in their portfolio. When the term safe-haven investment comes up, gold and the U.S. dollar are first to mind, but there are stocks out there that offer protection during times of volatility and are consistent performers over time.
Brookfield Asset Management Inc. (TSX:BAM.A)(NYSE:BAM) and Canadian Tire Corporation Limited (TSX:CTC.A) are my top picks, here is why.
Brookfield Asset Management Inc.
Brookfield Asset Management Inc. is a great investment for volatile economic times because the company is exposed to so many businesses. By purchasing this one company you are actually gaining exposure to a variety of businesses, and diversity is a key component of a company being able to thrive under varied economic conditions.
Brookfield Asset Management’s businesses include renewable energy, property, and infrastructure. Thorough its private equity branch, Brookfield invests in even more businesses.
The company’s private equity business is key in its ability to grow when times are tough. When the economy stagnates, many businesses struggle and Brookfield Asset Management can scoop up these businesses for a screaming deal.
Brookfield Asset Management’s strategies have served it well. The company has averaged about a 20% annual return over the past 10 years.
Canadian Tire Corporation Limited
Canadian Tire Corporation is a champion Canadian retailer. The company has been successful for decades and has been able to grow its earnings in good times and challenging times, and even in the face of new competition.
In recent years, the company has added an element of diversity to its business. In 2011 the iconic Canadian company purchased Forzani Group Limited, which gave it access to stores such as Sport Check and Atmosphere. The company also has access to financial services, through its Canadian Tire credit card business.
Diversity is an important element in a company’s ability to be a safe haven investment, but in the case of Canadian Tire its signature stores contribute greatly to the company’s ability to profit during challenging economic times.
Canadian Tire stores sell merchandise that can be used in “do-it yourself” applications. From home to auto repairs, Canadian Tire sells the goods you need to get the job done. When the economy stagnates people often look to trim their expenses and a great way to do this is to undertake home and auto repairs and maintenance by themselves.
Like Brookfield Asset Management, history shows that Canadian Tire thrives over the long-term. The company has averaged an annual return of over 10% over the past 10 years and returned even more cash to investors through its consistent dividend payments.
