As the Federal Reserve’s efforts to tame inflation roil both stocks and bonds, investors everywhere are struggling to figure out the best way to play defense in markets amid concerns that a recession is on the horizon. One of the top executives at Goldman Sachs Asset Management has a surprising idea: Beyoncé.

Katie Koch, the chief investment officer for public equities at GSAM, quips that “Beyoncé is ultimately recession-resistant” and so are other popular artists. That’s why the portfolios she helps oversee own shares of live-concert companies in the U.S. and Europe. While Live Nation Entertainment Inc. got hit hard during last year’s Covid-19 lockdowns, she points out that the company actually weathered the previous recession well and managed to grow revenue in both 2008 and 2009.

“So the consumer will spend in a recession,” she says, but “they'll be quite selective in terms what they spend on.” Another example is beauty products, she adds. And Koch doesn’t buy the notion that China is uninvestable: “You can buy assets here in the US as well as assets in China that are overly discounted for something that we know is eventually going to work out, which is that the economy will reopen”

Koch joined this this week’s episode of the “What Goes Up” podcast to discuss the state of play in markets and why -- despite share prices that have crashed over the past year -- investing in innovative companies is still a good idea for the long term.
 

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