(Bloomberg) -- 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 US 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 added. 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.
The tech-centric Nasdaq 100 Index has lost more than a quarter of its value since the start of the year. Koch says that there will be opportunities within the tech and innovation spaces again. “These things will work and they’re going to work really, really well. It’s just at the moment, it has been dislocated,” she said.
“The recent correction actually provides some really compelling entry points to get exposure to technology as a secular theme,” Koch said. “Tech is down at the moment, but it’s not out. Don’t give up on it.”
There’s more to that conversation. Take a listen here, or wherever you get your podcasts.
Listen to What Goes Up here.
©2022 Bloomberg L.P.