With the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) rocketing up 1.4% today, it certainly appears like there are no clouds on the horizon.
But that could change any day, and investors need to be prepared for it – as colleague Scott Phillips wrote earlier today.
You could sell up and get out of the market, but that's unlikely to do you any favours. What you really want is a number of companies that can weather a storm in your portfolio. I have a number of them in mine for the same reason.
Here are 5 you might want to consider.
Woolworths Limited (ASX: WOW)
Ok, you probably knew that was coming. People will still have to eat and drink during a downturn, and what better way to play that theme than with the giant supermarket retailer. Consumers also tend to drink more alcohol at home rather than in restaurants, good news for the retailer's Dan Murphy's, BWS and Woolworths Liquor stores. The company's 4.8% fully franked dividend will likely also help too.
CSL Limited (ASX: CSL)
The blood plasma company earns most of its revenues offshore and is fairly hardened against economic downturns thanks to the diversity and necessity of its products, and the geographic nature of its sales. Investors will always complain about CSL shares never being cheap – there's a reason for that. It's the quality of the company – 27% average annual returns to shareholders over the past decade is one.
Telstra Corporation Ltd (ASX: TLS)
Will people stop using the mobiles, surfing the internet, or downloading movies during a downturn? Unlikely. The giant telco has its fingers in many pies too and is banking on the rise of e-health. Like Woolworths, its 4.8% fully franked dividend is healthy enough to tide you over until the storm has passed.
Burson Group Ltd (ASX: BAP)
The automotive parts supplier is one company that will actually thrive during an economic downturn. Households tend to hand onto their cars for longer, meaning more visits to the mechanic and more spare parts required. And Burson supplies around 30,000 workshops around Australia with spare parts.
Collection House Limited (ASX: CLH)
Operating debt collection and receivables management services in Australia, Collection House should also see a spike in business during a downturn. The company also provides a number of other services to businesses, including credit management training, legal and insolvency services and hardship services. A solid fully franked dividend of 3.7% doesn't hurt either.
