(Bloomberg) --

As the Fed’s efforts to tame inflation roil both stocks and bonds, investors are struggling to figure out the best way to play defense in markets where some are concerned a recession may be on the horizon. One of the top executives at Goldman Sachs Asset Management has a surprising idea on how to do that: Beyoncé.Katie Koch, the chief investment officer for public equities at GSAM, joins this week’s episode of “What Goes Up” 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. But Koch also discusses why she thinks Beyoncé, like other popular artists, “is ultimately recession-resistant,” and how 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 Covid-19 lockdowns, she points out that the company weathered the previous recession well, managing to grow revenue in both 2008 and 2009. “So the consumer will spend in a recession,” Koch says, but “they'll be quite selective in terms what they spend on.” Another example of this phenomenon is beauty products, she says.

Koch also addresses the notion that China is uninvestable, saying she doesn’t agree. “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,” she explains.

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