When markets get turbulent, it’s always a good idea to seek safe stocks to buy.
In fact, there’s no better time to invest in less risky assets than now. Consider the following headwinds: a potential “second wave” of novel coronavirus inducing panic, a potential new cold war with China, current riots and protests in America and an upcoming U.S. presidential elections, all of which are sure to be met with obscene volatility.
While some investors opt to pull their money out of the markets out of fear, the best course of action is to buy assets that move higher with volatility, or remain resilient in tough times.
In fact, some of the top stocks to consider in times of chaos include:
Let’s dive a bit deeper into what makes each of these among the safest stocks to buy today.
Safe Stocks to Buy: ProShares Ultra VIX Short-Term Futures ETF (UVXY)
The ProShares Ultra VIX Short-Term Futures ETF isn’t actually a stock. It’s an exchange-traded fund. And while that might be considered cheating a bit for a list of “safe stocks to buy,” the fact that it’s designed to match two times the daily performance of the S&P 500 VIX Short-Term Futures Index makes it worth your consideration.
The first time I brought the UVXY to your attention was on Feb. 27, as it traded at $20. It would explode to a high of $135 on novel coronavirus fear. While the ETF has since cooled to $40.35, it could spike again on fears of a “second wave” of the virus and as we near the volatility inducing presidential election in just months.
The trade has plenty of gas. Should markets fall in the months ahead, I strongly believe the UVXY ETF could test $65 again shortly.
Amazon (AMZN)
Amazon has been one of the top stocks to buy during the coronavirus scare, with most consumers shifting from brick-and-mortar shopping to online shopping during the pandemic.
Of course, that doesn’t mean AMZN stock is resilient to crashes. But it has proven itself to be among the safest stocks to buy on the market, especially in the face of the coronavirus. After all, consumers buy more online when they’re home, which Amazon benefits from.
The hype for AMZN stock is even more profound when you add to it positive assessments from analysts. For example, Mark Tepper of Strategic Wealth Partners, who notes, “Amazon’s the best play right here … It’s the best diversified post-Covid play. They’re literally in every single business that’s going to thrive on a going-forward basis. You’ve got e-commerce, cloud, digital advertising, personal assistance.”
In addition to being resistant to the impact of the coronavirus, Amazon is also a massive growth machine that continues to thrive.
In its first quarter, the company delivered 21% year-over-year revenue growth to $87.4 billion, beating Street expectations of $86.02 billion. It even beat its own high-end of guidance at $85.60 billion. Its operating cash flow climbed 25% year over year. And its Prime members soared to more than 150 million.
Not only is Amazon thriving in e-commerce, it could soon dominate the cloud, too. Volatility, or no volatility in the market, Amazon is one of the top stocks to own. In the near term, I strongly believe the AMZN stock could run back to $2,722.
Clorox (CLX)
Clorox may be one of the safest stocks on the market. Whether we’re in a bull or bear market, Clorox will see demand no matter what. The coronavirus only sent the stock higher with sizable demand for cleaning products. Plus, with warnings of a “second wave” of the virus hitting the global community, it’s a safe bet the CLX stock could run even higher.
On the heels of the pandemic, Clorox’s most recent earnings report delivered the goods. According to the company’s press release: “Earnings of $241 million, or $1.89 diluted EPS, compared to $187 million, or $1.44 diluted EPS, in the year-ago quarter, representing a 31% increase in diluted earnings per share. Diluted EPS growth was driven primarily by net sales growth and gross margin expansion, which were partially offset by higher selling and administrative costs as well as higher advertising investments.”
Near term, I’d like to see the CLX stock break above triple top resistance to test $220.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, he did not hold a position in any of the aforementioned securities.
