It’s a tricky time to be an investor right now. The market keeps climbing to new highs, but the threat of a recession continues to loom as political uncertainty and troubling macroeconomic factors keep investors from getting too comfortable. The result has been an unstable bull market in which traders are constantly worried about a drop-off. So are there any good stocks to buy in a market that keeps ticking upward?
Yes and no. If you’ve got a long timeline and you can stomach a bit of turbulence, then you should be focused on buying quality companies that have the financial fortitude to thrive in a downturn.
Dave Ramsey, a best-selling author, radio host and the CEO of Ramsey Solutions says now isn’t the time to start panicking about a recession.
“If the Gross Domestic Product (GDP) shrinks, or recedes for two consecutive quarters, we call that a recession. Nobody’s coming to your house to take your children. It’s two quarters — six months that the economy shrinks. It’s not the end of the world. The job market has been strong. There are more jobs today than people looking to fill them. Do I think the economy will shrink in two consecutive quarters? I don’t know. Maybe, but it would first have to shrink in one quarter and that hasn’t happened yet.”
He’s not wrong. If you stayed out of the market completely over the past few months because you were worried about a crash, you could have missed out on some pretty incredible gains this earnings season. Now isn’t the time to panic, it’s the time to ensure you’re well diversified and pick up long-term bets that will carry you through a downturn should it materialize.
Here’s a look at three stocks worth considering as the market continues to fly higher.
Stocks to Buy: Dow Chemical (DOW)
Dow Chemical (NYSE:DOW) stock is a spin off from DowDuPont that has had a turbulent few months since it hit the market on its own back in March. The firm makes a wide variety of coatings, paints, packaging and polymers. As part of its packaging arm, DOW makes styrofoam, which has been one of its best selling products.
While the firm’s ties to crude oil make it susceptible to volatility associated with the rise and fall of oil prices, DOW stock’s 5% dividend yield is a great way for long-term investors to build their wealth over time. Its most recent earnings results also suggested that easing tension with China should be a boon to DOW stock in the coming months.
Visa (NYSE:V) stock is up 26% so far this year, but it still makes for a good buy for long-term investors. The firm boasts a strong balance sheet and a track record of consistent dividend increases, V stock is a great play for those who are looking for a buy-and-hold investment.
As payments continue to shift away from cash, Visa’s strong position makes it likely to benefit as the industry grows over the next decade. The firm is also relatively safe compared to peers in the case of a recession. Visa operates as a payment processor and doesn’t actually lend out money. That means the firm won’t be bogged down by credit delinquency if the economy takes a turn for the worst.
AT&T (NYSE:T) stock suffered through the beginning of 2019, but despite the firm’s impressive comeback so far, I believe it has further to climb in 2020. AT&T is working to pay down its debt pile and rework its business model, which hurt investors sentiment and took the share price lower at the end of 2018. However, T stock is on the edge of greatness should management be able to execute its strategy over the next few years.
The firm is working to roll out a streaming service that will put its TimeWarner acquisition to use by drawing on the company’s massive media library. Plus, AT&T is rolling out a 5G network across the U.S., which many believe will help the firm regain pricing power. To be sure, T stock likely still has some volatility to come in the near-term, but its 5.18% dividend yield makes riding out the bumps a bit easier.
As of this writing, Laura Hoy was long T.