Cabot’s Best Safe Investments for Uncertain Times
10 Stocks that Will Help You Preserve (and Even Grow) Your Wealth
Whether we’re in a bear market or a correction, there’s no disputing the market has been turbulent.
In a bear market we see a broad market decline of at least 10%. In a correction, many stocks will decline even more than that, especially stocks that were overvalued or extremely popular prior to the correction. In recent corrections, tech industry “glamour stocks” like Apple (AAPL), Amazon (AMZN) and Facebook (FB) have handed investors some of the biggest losses.
But not everything goes down during corrections!
Some safe haven investments become more popular during corrections, and see their prices rise as investors move money from riskier places to safer places.
These investments vary from the nearly loss-proof, like short-term treasury bills, to the countercyclical, like consumer staples stocks.
This report gives you a comprehensive review of the safest, productive places to stash your cash when times get tough. From discussion of fixed income investments like preferred shares and bonds, to ten safe stock recommendations.
These ten “safe” stock recommendations share a these common attributes:
- Low Volatility
Volatility is basically a proxy for risk. Volatile stocks have larger percentage price swings. Beta is a measure of volatility that compares the average prices moves of a stock to the average moves of a benchmark, typically the S&P 500. A beta of less than 1 means the stock is less volatile than the benchmark and a negative beta means they will tend to rise while the rest of the market is declining.
Stocks that are closely tied to economic growth or the health of financial markets will often fall more than the broad market during downturns. Conversely, countercyclical stocks will fall less than the market during downturns. Classic countercyclical industries are consumer staples and utilities, because demand for their products is highly independent of economic conditions.
Many stocks that act as safe havens are also attractive as long-term investments because they pay reliable dividends. Dividends are an indicator of reliability: they mean the company’s business generates predictable income during a variety of economic conditions.
Whether we’re in a bear market or simply a correction, many investors will find these to be good investments for these uncertain times.