Several analysts and economists have sharply increased their odds for a U.S. recession in the wake of President Donald Trump's aggressive tariffs announced on April 2. Just to name a couple, HSBC analysts see a 40% chance of a recession by the end of 2025, and JPMorgan Chase (NYSE: JPM) now sees a 60% chance of a global recession if the tariffs are left in place.
The tariffs and expectations for their economic impact are already sending stocks sharply lower. The S&P 500 is down by about 16% from its recent high, and the Nasdaq is on the cusp of entering a bear market (defined as a drop of 20% or more from the peak). But there are some stocks that I'd be comfortable buying right now, even if we knew a recession was right around the corner.
The ultimate recession-resistant stock?
I've written before that if I were allowed to own only one stock, it would be an easy decision to invest solely in Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). The Warren Buffett-led conglomerate is perhaps best known for its massive stock portfolio, but the other two parts of its business are what make it such an interesting investment during uncertain times.
First, Berkshire's subsidiary businesses are largely designed to perform well no matter what the economy is doing. GEICO is a massive one, and people still need to pay their auto insurance in tough times. The same goes for utility giant Berkshire Hathaway Energy's electric and gas bills. Of course, some Berkshire subsidiaries are cyclical businesses, but the big ones are extremely resilient.
Second, and most importantly during tough times, is Berkshire's financial flexibility, which comes in the form of $334 billion in cash and Treasury securities on its balance sheet. For the time being, these are generating billions of dollars in interest every quarter, but they also give Berkshire unmatched ability to take advantage of plunging stock prices and attractive business valuations.
Steady income, no matter what
Realty Income (NYSE: O) is a real estate investment trust, or REIT, and one of my largest and longest-held investments. While its stock price can certainly be volatile in short periods, especially if interest rates fluctuate, this is a business built for steady compounding year after year, no matter what the economy is doing.
Realty Income owns about 15,600 single-tenant properties, and about 80% are leased to retail tenants. However, Realty Income's tenants were hand-picked for their recession resistance, immunity to e-commerce disruption, or both. Top property types include dollar stores, convenience stores, fitness centers, and restaurants, just to name a few.
Not only that, tenants sign long-term net leases, which require them to pay taxes, insurance, and maintenance, and also have annual rent increases built in.
The proof is in the business performance. Realty Income's portfolio is about 99% occupied, and the company has raised its dividend for the past 110 quarters in a row. At the current price, Realty Income has a 5.7% dividend yield, and it has produced 13.4% annualized total returns since its 1994 New York Stock Exchange listing, handily beating the S&P 500 over the long term. With a multitrillion-dollar addressable market opportunity and a history of smart capital allocation, Realty Income is a stock I'd buy right now, even with a massive level of uncertainty.
Buy for the long term
Both of these stocks have held up quite well in the turbulent 2025 stock market. Berkshire and Realty Income are up by 12% and 6%, respectively, so far in 2025 -- and that's after the ugly reaction to the tariff announcement. That said, these stocks could certainly become volatile in the short term, so if you decide to invest, do so with the long term in mind.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $263,993!*
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Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
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*Stock Advisor returns as of April 1, 2025
JPMorgan Chase is an advertising partner of Motley Fool Money. Matt Frankel has positions in Berkshire Hathaway and Realty Income. The Motley Fool has positions in and recommends Berkshire Hathaway, JPMorgan Chase, and Realty Income. The Motley Fool has a disclosure policy.
