Investors beware: These 8 stocks have proven themselves in bear markets so far

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S&P 500 still under pressure
Different stress factors make Brenmarkt more likely
Healthcare, consumer discretionary and real estate stand out positively

The international stock markets remain under pressure. Numerous negative factors are currently weighing on the markets, which repeatedly cause severe setbacks: persistent delivery problems, the Ukraine war, high inflation, skyrocketing energy prices and tighter energy prices monetary policy belong to it. This has already had a significant impact on the stock markets this year. The market-wide leading US index S&P 500 has already lost 13.53 percent since the beginning of the year. Measured against its 52-week high on January 5, 2022 at 4,818.62, it is even a discount of 14.47 percent, which brings the stock market barometer dangerously closer to the dreaded bear market, which is spoken of with a minus of 20 percent.

A look into the past

However, a discount of 20 percent does not have to be enough during a bear market. According to Howard Silverblatt of S&P Dow Jones Indices “Investors Business Daily”, the S&P 500 has fallen by an average of almost 37 percent in the last three markets. During the bear market following the bursting of the dot-com bubble in 2000, it even went down almost 57 percent. No wonder, then, that the important 20 percent mark is being watched with eagle eyes. At the beginning of the year, no one expected such a downturn, Oanda strategist Edward Moya told IBD: “At the beginning of this year, no one expected the S&P 500 to fall into Brenmarkt territory, but the persistent inflation, another mistake in Fed policy and fears of a recession have made investors restless”. In his opinion, the only remedy would be a change of course by the US Federal Reserve. Only when the Fed pursues a less aggressive monetary tightening course can investors breathe again.

The outperformers of the last fuel markets

Given this challenging environment, it is of course difficult for investors to find the sectors and companies that offer good opportunities even during a bear market. Yet they exist, stocks that have outperformed during past markets. Investors Business Daily compiled them using data from S&P Global Market Intelligence, S&P Dow Jones Indices and MarketSmith. On the other hand, the sectors that had a particularly difficult time in previous markets also stand out. The tech sector is currently under increasing pressure, as is the financial sector.

The healthcare industry

The healthcare sector in particular stands out as a positive example during the past fuel markets. IBD names the dialysis provider DaVita as an outperformer. EPS increased annually between 2005 and 2016, and stocks gained an average of 200 percent during the last three markets, primarily due to a phenomenal price increase of 664 percent between March 2000 and October 2002. Along with DaVita, AmerisourceBergen, up 107.8 percent, and Quest Diagnostics, up 54.1 percent, are among the healthcare sector’s top performers over the last three core markets. The background is that even during recessions, people continue to need their medicines or medical services.

The non-basic consumer goods

Another sector that has held up well during past downturns in the stock market is consumer discretionary. Investors Business Daily names NVR with a price gain of 110 percent, CarMax with +90.3 percent, AutoZone with a growth of 64.3 percent and Penn National Gaming with +50 percent. This area generally benefits from the fact that consumers are less likely to make large purchases in times of crisis and invest more in repairing their possessions, such as cars.

The real estate sector

With Ventas, a company from the real estate sector has also made it onto the list of the best performers in the last three markets with a plus of 59.7 percent. Ventas has already recorded a double-digit price increase this year, while other stocks have been severely penalized.

Of course, the past is not a reliable indicator of the future. It remains to be seen whether companies will be able to outperform in this market, should it actually occur.

Editorial office finanzen.net

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