3 Investments For A Bear Market

Stocks extend their losing streak, with the S&P 500 down almost 3% this week. And Swiss investment bank UBS says there’s a 60% chance we experience a recession.

Today’s article looks at three low-risk investments to weather the storm.

1. Utility Stocks

On July 26, 2021, Barron’s published an articled titled “Big 5 Tech Stocks Now Account for 23% of the S&P 500.”

In it, they explained how Apple, Microsoft, Alphabet, Amazon, and Facebook make up a combined 22.9% of the S&P 500 index. When you buy a diversified Vanguard or SPDR ETF, almost one quarter of your money is tied up in a handful of tech companies.

There’s nothing wrong with index investing.

But, a lot of safety-seekers end up highly concentrated in one specific sector.

Utility stocks actually function in a similar manner to big tech. They operate on a recurring revenue model (people paying their water and electric bill every month), but don’t carry tech’s geopolitical risks.

I recently analyzed a stock called The York Water Company.