The Market goes up and the market comes down. It’s great to profit on the upswing but what happens when the market suddenly corrects and you lose your profits and more? The high tech darlings are on the verge of correcting right now. But, are there Correction Resistant Stocks that would protect your portfolio? The Motley Fool offers three crash resistant stocks that might be worth a look.
[Y]ou can protect yourself from a stock market correction or crash by keeping some defensive stocks in your portfolio. Here are three good examples you may want to consider.
The suggested stocks are Toronto-Dominion Bank, Welltower and Realty Income. TD bank has paid dividends every year since before the American Civil War, for 160 years! The bank grows steadily, pays its dividend in Canadian dollars and focuses on excellent service in retail banking. Welltower is a real estate investment trust that focuses on health care properties. This is a younger company than TD bank, at 46 years, has low debt and a good credit rating allowing it to take advantage of opportunities as they arise. Realty Income is a REIT. It does net leases to selected businesses in low price retail, non-discretionary retail (Walgreens) and service oriented business like LA Fitness. In short, stocks whose prices are based on steady growth with a solid and conservative business plan tend to do well when the market corrects, when there is a recession and when high flyers like the FANG stocks take a hit.
Dividend Stocks for Hard Times
When the high flyers in the market get hit during a downturn smart money exits these equities and looks for security. Here are three dividend stocks highlighted by The Motley Fool which will probably go up if the market correct in high tech.
Brookfield Infrastructure Partners (NYSE:BIP), Wal-Mart (NYSE:WMT), and Johnson & Johnson (NYSE:JNJ) are very different companies, but they share one thing in common: Our Motley Fool contributors think they’re all great investments when markets tumble. If the stock market hits a rough patch, here’s why it might be smart to buy these stocks.
Each of these different businesses makes its money by providing goods and services that retain their demand even when the economy goes down. Thus they are correction resistant stocks as their fundamentals won’t suffer. And, because money needs to go somewhere these stocks will benefit from a high tech correction.
End of the Goldilocks Moment
Market Watch reports that Goldman Sachs believes that the stock market Goldilocks environment is about over.
Equities are currently enjoying a “Goldilocks scenario,” Goldman wrote, noting the “unexpected mix of healthy growth and declining rates,” which has created an environment where stocks-particularly technology stocks, the strongest-performing gainer this year despite recent weakness-have done extremely well. Major U.S. indexes have rallied to a series of records while volatility dropped to multidecade lows as investors shrug off all manner of potential headwinds.
Goldman does not believe that current conditions supportive of further market growth will last much longer. Thus a correction is likely and smart traders and investors will look for correction resistant stocks.
Are There Correction Resistant Stocks? PPT
