Which Stocks Should You Buy When the Market Crashes?
Some people may steer clear of the stock market when it crashes and even go into panic mode when rumors about a crash start circulating. But even in what seems to be a really bad situation, some stocks are still worth buying. So, if you want to make the most of a market crash, you should invest in the following:
Johnson & Johnson
The best investment option is one that remains steady when everything else has exploded in varying directions, and then grows when the market recovers. Well, the description definitely fits Johnson & Johnson. When the S&P 500 lost one-third of its value in 2008, the company only experienced a decline of 7.8%, which is less worrisome compared to other stocks. In 2009, when the market got back on its feet, it gained 27%. This may have something to do with the fact that Johnson & Johnson has a diverse market, from consumer health care products to medical equipment.
Unlike tech stocks, biotech stocks are not affected when IT budgets fall. After all, health care, life-extending therapies and other related products still sell when computer and network infrastructure are not making much. This is why Celgene provides an ideal stock option during a market crash. In fact, it survived and succeeded during the Great Recession, with shares climbing to 25% at a time when the S&P 500 was at its recession low.
This company makes heart valves for patients requiring treatments for chronic heart disease. Although they use technology, their main business is in health care, which basically explains why they still get returns during a recession. In fact, between December 2007 and December 2008, its stocks and profit consistently grew by 88%.
If you are not one to take risk with your investments, you should play it safe and smart. Keep your cool when the market crashes and invest in the companies listed above.