Personal Finance
Five Stock Sectors To Hold If The Market Crashes
09.13.10, 8:00 PM ET
Let's face it, it wouldn't take much right now to put stocks into a major tailspin. Things like an escalation of hostilities on the Korean peninsula, another surprise uptick in unemployment and unexpected earnings disappointments could send the market plunging 10-20% or more.
It's hard to resist the urge to dump equities when the market goes south. But there are always stocks worth holding through a calamity because they're likely to persevere, reward you over the long haul, and maybe even provide a smoother ride in terms of price volatility. At current prices, these companies are already attractive values and would become virtually irresistible if the market crashed. Here are some examples in various sectors.
Consumer Services/Retail
This area is always very iffy in a weak economy, but fans of consumer-oriented stocks shouldn't let a correction cow them into ditching the higher-quality names such as
Industrials
Industrial stocks usually do particularly well early in a recovery, which is where we are now, so it's not a good idea to sell them when they're plodding through a recession or during a panic. You probably would have regretted dumping diesel engine maker
Consumer Discretionary
You don't want to panic and sell good stocks in this sector for the same reason you'd keep a worthy industrial stock during a downturn. When the economy starts to recover, it's going to come back. And if it sells something people really seem to want, a crash and recession might not slow it up much at all. Take
Consumer Staples
These stocks are important to own because consumer staples are products people need even if the market tanks or a recession is on. Although the latest recession hurt
Technology
Not only are tech giants
Where to Be Extra Cautious
While stock picking is risky in general, certain sectors are especially hazardous now. The most obvious are health care and financial services because of sweeping reforms, which are apt to be a drag on those industries although exactly who will be affected most is hard to say. Picking stocks is tough enough, but amidst worries of a double-dip recession, be especially vigilant in what sectors you play.
http://www.forbes.com/2010/09/13/market-collapse-personal-finance-economy-stocks.html?boxes=Homepagemostpopular
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