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3 recession-proof stocks for defensive investors

The S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) is flirting with multi-year highs and some estimates suggest it is headed for 6,000 points by the end of the year. That’s a 9.4% upside from today’s level!

However, as the market continues to climb higher, fears of a share market crash are escalating. And as my fellow writer Mike King highlighted, a market crash will happen – it’s just a matter of when and how bad it will be.

As tempting as it can be to invest predominantly in growth stocks to take advantage of the market’s climb, it remains as important as ever to ensure your portfolio is supported by ‘recession-proof’ stocks in case of a heavy fall.

Australia’s gold miners are a good option for investors to consider. Gold acts as an investor safe haven, so when uncertainty creeps into the markets, the shiny metal’s price increases which, in turn, benefits the miners themselves.

Northern Star Resources Ltd (ASX: NST) is well worth a look for exposure to the gold sector. Although it has jumped in price recently it is still looking very appealing. To begin with, analysts are forecasting its earnings could hit 29.8 cents per share in FY15 – up from an estimated 5.9c in 2014 – putting it on a projected P/E ratio of 5.4 — while it also offers an attractive fully franked dividend.

Another good option for investors to consider is blue-chip stock Crown Resorts Ltd (ASX: CWN). Given the nature of the entertainment and gaming industry, Crown is relatively immune to economic downturns. With the stock sitting well below its 52-week high, it offers a 2.4% dividend yield and excellent growth potential in Australia and overseas.

In times of economic difficultly, it is also common that individuals will attempt to secure short-term loans and offload their assets for a little spare cash. Cash Converters International Ltd (ASX: CCV) is a dominant player in this industry and with its shares trading at $1.13, represents a solid buy today.

Here's an even BETTER ASX to consider!

The Motley Fool's TOP analysts have recently named their Top Stock for 2014. In addition to offering tremendous growth potential and a fat, fully franked dividend yield, it also operates in a recession-proof industry!

Get The Motley Fool's #1 pick now in our newly updated investment report. It's yours FREE! Simply click here for your copy of "The Motley Fool's Top Stock for 2014."

Motley Fool contributor Ryan Newman owns shares in Cash Converters International Ltd.

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