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3 Stocks to Help Survive the Downturn

November 25th, 2008

The stock market is currently so volatile it is a bit ridiculous. One day it is down 500 points, the next it is up 350. In this seesaw market, where can you turn too? I have 3 picks that I think will not only help you survive, but prosper.

1. Johnson & Johnson (JNJ): Johnson & Johnson is a company that I feel should be safe in a downturn. It deals in health-care and hygiene products. Even in a recession, people like to stay healthy and take showers. I am fairly confident that this is the case for the vast majority of people.  This has been steadily growing and paying dividends for a long time, and I am confident that it will continue. It currently has a dividend of 3.11% so it will pay you while it safely protects your capital in these tough economic times.

2. Pepsi (PEP): Pepsi is another company that I am confident will ride out these rough economic times. People generally continue to eat and drink things in between their showers, so Pepsi is also positioned pretty well as far as I am concerned. Currently, I have a 12 pack of Mountain Dew and a 12 pack of Pepsi in my fridge. These are things that most people will continue to consume even in a rough economic environment. Pepsi also has a dividend over 3% which helps to ease my mind through the gyrations of the market. (Bonus pick - Coke (KO) if you prefer Coke, it is also a great stock that fits in the same mold as Pepsi.  Either one would be fine in your portfolio, but I would not get both as diversification is important).

3. Verzion (VZ): Verizon is another stock that I currently like. It is slightly more vulnerable to a recession than my other two picks as it is in the consumer spending arena, but I feel that it is strong enough to survive and even thrive. While cell phones may not be a necessity in the same sense that food, health-care, and hygiene products are, I need my cell phone. I really don’t know how we managed without them, and I don’t know a single person that has gotten rid of their cell phone. Everyone I know has one, and they all use it throughout the day. They text, they call friends and family, and they surf the internet. Verizon really does have a great network and I think they will continue to perform even in a recessionary environment. Continuing with my theme of great dividends, Verizon is currently yielding 6.19%.  This should really give a reasonable floor to the stock and help you make money even if the stock doesn’t go up.

Good luck and remember to look past the day to day movements of the market to the long term success of your portfolio.

Author: Derek Clark Categories: Finance Tags:
  1. March 2nd, 2009 at 01:40 | #1

    There is obviously a lot more to figure out about this issue, but you made some really good points. I will definitely be checking here more often. Thank you.