7 Stocks To Buy When The Market Crashes

Stocks to Buy When The Market Crashes: The first half of 2020 took investors on a rollercoaster ride. The worldwide pandemic caused a wave of panic, fear, and uncertainty to settle over the market. The S&P 500 – a normally steady index – saw a 34% drop in as many days earlier this year. This is the fastest the index has ever dropped into bear territory.

For the three months following the drop, though, the index was able to recover over 80% of the loss – all while the rate of unemployment soared higher than the days of the Great Depression.

Historically, there’ve been other times when the market bottomed well ahead of the economy finding its valley – and there’s good reasons to prepare for the next market fizzle and another market crash.

Even if the trend continues upward, market crashes happen – they’re inevitable. So, whether you’re new to investing or you’re a seasoned pro, learning how to use others’ fears to your own advantage is a necessity. These are seven stocks to buy when the market crashes.

Berkshire Hathaway Is A Cash Machine

The pandemic put the brakes on a lot of investors’ plans, resulting in one of the deepest bear markets in history. Major indexes fell sharply. So, isn’t that the time to buy? But what did the well-known market guru do?

Warren Buffett did nothing. He bought virtually no shares in any stock during the 2020 crash.

But without lifting a finger, Berkshire Hathaway went from a cash balance of $128 billion in Q4 2019 to $137 billion upon Q1’s end in 2020.

The Berkshire Hathaway portfolio has some of the biggest, household names within it:

• Geico Insurance
• Battery-makers, Duracell
• Ice cream giant, Dairy Queen
• Undergarment producers, Fruit of the Loom
• Railway, BNSF

When markets crash, the Berkshire portfolio acts as a fortress port in a storm. It isn’t immune to downswings by any means but equally it won’t plummet to the earth as so many other companies with less fortress balance sheets will do.

Clorox: Cleaning Supplies Are In High Demand

It makes sense that companies focused on cleaning products would be faring well during a pandemic – but no cleaning company is shining quite so bright as Clorox.

While several industries were hard-hit by coronavirus, lockdowns, and other challenges, Clorox flourished. In an environment of communities hyper-focused on sanitizing and overall health and hygiene, this company’s products have flown off shelves.

This caught the attention of investors. Not only was the company able to sail right through the crash that deeply affected other companies, but its price soared to new heights – in fact, 40% higher than any of Clorox’s past record highs. Could this run keep going?

CEO of Clorox, Benno Dorer, saw an opportunity to generate even further revenue by partnering with other companies. One of the Clorox company’s newest partnerships is with United Airlines, the other with Cleveland Clinic.

Together, this triad expects to aid in lowering and mitigating risk for airline passengers. So far, United’s customers are happy about the partnerships.

With the help of Clorox and Cleveland Clinic, United Airlines is making flying safer with self-scans, employing the use of Clorox sanitation products on every flight, and even providing sneeze guards, or face shields, to its employees.

The combination of this cleaning company, airline, and hospital have been able to prove that flying can still be a healthy mode of travel.

In the future, more partnerships are likely to develop, but many analysts believe Clorox’s price is already lofty – could any new partnerships actually send the price even higher?

And, for the 43rd year in a row, Clorox has raised its dividend. The dividend raise goes into effect on July 29, 2020. This will pay $1.11 in quarterly dividends to shareholders on August 14, 2020. The payment is a 5% increase over its past dividend payments.

Wheaton Precious Metals A Safe Haven?

In May 2020, precious metal prices saw a significant spike. In one week, gold increased by 2.7% and silver by 6.5%. But the increase may not be over.

These gains were just the start of a hike on precious metal value. The global economy is sure to continue driving the demand for these precious metals.

When an economic crisis hits, the demand for these metals – and investor interest – always sees a spike. Some of the most important factors driving this most recent increase include:

• COVID-19 has sent other, traditional investments into tumultuous seas
• Crude oil has plunged
• Stock markets around the world crashed
• Interest rates have plummeted
• And bonds have reached near-zero

As these assets see more and more downward trends, savvy investors realize the safe haven that gold, silver, and other precious metals really is.

Wheaton Precious Metals is one of the largest precious metals companies in the world. Its shares allow investors to directly leverage the increases in precious metal prices.

Mining contracts involve upfront payments which help cover mining costs and a set amount for the metals extracted and produced. Purchase prices let Wheaton profit from every single ounce, thereby leveraging the current increase in metal prices.

Wheaton’s current dividend is $0.10 and amounts to a 1% current annual yield.

Walmart The Stalwart

Consumer staples stand the test of time and there’s no better test than a global pandemic and recession.

Walmart is a consumer staple and therefore considered a defensive stock – these kinds of stocks are widely held, long-term, and considered a core piece of any investor’s portfolio.

Now growth isn’t necessarily spectacular, but the giant’s consistent annual sales create considerable cash flow – and the dividends are tough to beat.

Investors are smart to prefer retailers over some other industries, although there aren’t many left today that can crush the competition as well as Walmart.

Walmart is another company, like Clorox, that actually benefitted from the coronavirus outbreak. Recently, it’s even decided to give Amazon a run for its money by creating Walmart+, an online ordering and home delivery service.

Amazon has surely given Walmart something to aspire to, but its incredible stock of more than 11,500 stores and now an online presence surely make Walmart a formidable opponent in the retail space.

In fact, investors are so confident in and comfortable with Walmart that even in the face of a 40% overall market crash, Walmart stock fell just 15%.

Johnson & Johnson

After facing hardship and legal battles in 2019, Johnson & Johnson is one of the pharma companies racing towards a vaccine for the coronavirus. This latest charge is ruffling feathers, but also somewhat erasing the company’s 2019 misfortunes.

Johnson & Johnson stock took a hit in March 2020 but once the pharmaceutical giant exposed its plans for a vaccine, bullish expectations pushed the stock to new heights – and less than 30 days later. Johnson & Johnson CEO, Alex Gorsky, says he sees the project becoming hugely successful.

As of market closing on July 15, 2020, Johnson & Johnson shares had risen 1.6% from July 2019. But even with all this seemingly good news, the pandemic still weighs heavily on Johnson & Johnson and the market as a whole.

Johnson & Johnson has stated it will discontinue baby powder production and sales for its North American demographic, but there are still claims and litigation in process from several consumers who state the company’s baby powder has led to cancer.

On top of these claims are those that state Johnson & Johnson has played a role in the ongoing nationwide opioid crisis, as well.

Coca Cola Dividend Remains Attractive

In just a few short months, Coke’s stock has risen over 20% to land at its current stock price of $45 per share. At the end of March, the cola company was trading at a low of $38 due to investors getting spooked over coronavirus and global financial downturn fears.

The company is still trading about 25% lower than its high of $60 per share in February of this year.

But are investors putting the cart before the horse? Or is this comeback actually justified? The recovery is more justification than anything else and though the stock will most likely continue to increase, it’ll be modestly.

If the coronavirus continues to ebb and eventually dissipates, the global economy can reopen and lockdowns can be lifted. At such time, demand will pick up and supply bottlenecks will begin to disappear. Refranchising will also help as higher sales mean better revenue.

These predictions could occur as early as the end of this year. Then 2021 should return to a semblance of normalcy with healthier revenue growth.

As the company begins the refranchising of their lower-margin plants, overall company margins are expected to grow, especially after coronavirus departs, at least for the most part.

So, although 2020 is shaping up to look like a good year for Coca Cola, analysts are beginning to set their sights on next year. Healthy revenue expectations and wide margin growth could send the stock higher than its current levels.

American Tower Wins When You Make You Calls

American Tower is a cellphone tower company based in Boston, Massachusetts. The company provides these towers for use to other companies, such as cellular services, television programming, and radio broadcasts.

American Tower’s entire portfolio includes almost 41,000 properties in the US alone and almost 140,000 around the world for a whopping 180,000 tower sites.

On July 22, 2019, American Tower closed out the day with a share price of $206.70. Just one year later on July 21, 2020, American Tower closed at $260.53 per share. While the company bottomed out at $179 per share during the brunt of the market crash on March 23, 2020, it appears the company not only can make a great comeback, but that it has improved its year-on-year valuations.

Stocks To Buy When The Market Crashes

It’s tough to watch a portfolio shrink during bear markets – even tougher to stand your ground and hold onto your shares. But when you’re investing – especially for the long haul – the best course of action is usually to do nothing.

Time in the market generally beats timing the market. If you’re looking for seven stalwart stocks that could buffer the stormy winds of the next crash, Berkshire Hathway, Coca Cola, Clorox, Walmart, American Tower, Johnson & Johnson, and Wheaton Precious Metals are tough to beat.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.