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Gold

Schiff has long been a fan of the yellow metal.

“The problem with the dollar is it has no intrinsic value,” he once said. “Gold will store its value, and you'll always be able to buy more food with your gold."

As always, he’s putting his money where his mouth is.

As of Mar. 31, Euro Pacific Asset Management held 1.645 million shares of Barrick Gold (GOLD), 335,740 shares of Newmont (NEM), and 409,155 shares of Agnico Eagle Mines (AEM).

In fact, the three gold mining giants were the firm’s top three holdings, representing 8.0%, 5.4%, and 5.0% of its portfolio, respectively.

Gold can’t be printed out of thin air like fiat money, and its safe-haven status means demand typically increases during times of uncertainty.

If gold prices go up, miners like Newmont, Barrick, and Agnico will likely enjoy bigger profits.

Recession-proof income stocks

Dividend stocks offer investors a great way to earn a passive income stream, but some can also be used as a hedge against recessions.

Case in point: The fourth-largest holding at Euro Pacific is cigarette giant British American Tobacco (BTI), accounting for 4.6% of the portfolio.

The maker of Kent and Dunhill cigarettes pays quarterly dividends of 68 cents per share, giving the stock an attractive annual yield of 6.2%.

Schiff’s fund also owns over 160,000 shares of Philip Morris International (PM), another tobacco king with a dividend yield of 4.9%. The Marlboro cigarette producer is Euro Pacific’s ninth-largest holding with a portfolio weighting of 3.1%.

The demand for cigarettes is highly inelastic, meaning large price changes only induce small changes in demand — and that demand is largely immune to economic shocks.

If you’re comfortable with investing in so-called sin stocks, British American and Philip Morris might be worth researching further.

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Agriculture

When it comes to playing defense, there’s one recession-proof sector that shouldn’t be overlooked: agriculture.

It’s simple. Whatever happens, people still need to eat.

Schiff doesn’t talk about agriculture as much as precious metals, but Euro Pacific does own 142,052 shares of fertilizer producer Nutrien (NTR).

As one of the world’s largest providers of crop inputs and services, Nutrien is positioned solidly even if the economy enters a major downturn. In Q1, the company generated record net earnings of $1.4 billion.

Nutrien shares are up about 11% in 2022, in stark contrast to the S&P 500’s double-digit decline year-to-date.

Given the uncertainties facing the U.S. economy, investing in agriculture could give risk-averse investors a peace of mind.

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Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

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