S&P 500: 8 stocks you’ll wish you owned when the recession hits

Recession is not fun to live through. But if you prepare, they no need to be in pain for your S&P 500 portfolio.

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Eight stocks in the S&P 500, including information technology stocks F5 (FFIV) and Tyler Technology (TYL) plus the discretion of the consumer automatic zone (AZO), all of which have averaged 30% or more gains in the past three recessions since 2000 and have beaten the S&P 500 each time, according to Investor’s Business Daily data analysis from S&P Global Market Intelligence, CFRA and S&P Global Market Intelligence. marketSmith. These stocks have rallied nearly 43% on average over the past three recessions. That’s pretty impressive if you consider the S&P 500 itself has fallen nearly 19% over the same time period.

If you’re not thinking about a recession, it’s time. All signs are ripe. A recession is a period in which GDP falls twice in a row. Today, the inversion of bond yields is a stark warning of a recession. “The yield curve seems relentlessly predictive of a recession in 2023,” said Quincy Krosby of LPL Financial. So does the Fed, which slows down the economy. Even the company’s CEOs see trouble ahead. Could the 14th recession since 1945 be near?

Brad McMillan, Chief Investment Officer at Commonwealth Financial Network, said: “The Fed’s actions to reduce inflation will continue to weaken the economy. Depending on how much higher interest rates are affected, we’ll have to wait and see how much higher interest rates do. could see a recession in 2023.”

The question is where to put your money.

S&P 500 sectors survive recession

It’s tempting to assume all the S&P 500 stock storage tank in recession. But that’s simply not true, said Sam Stovall, CFRA Strategist.

Amazingly, the S&P 500 itself has actually increased by an average of 1% in all recessions since 1945, Stovall found. How can this be? Investors often dump stocks before a recession really begins. But even if you go back to 1990, when trading is more correlated with business cycles, the S&P 500 is down only 8.8% on average.

And if you’re looking for places to hide, there are two sectors S&P 500 Those are the items that have risen in recession since 1990, Stovall said. That’s health care, up 1.8 percent on average, and consumer staples, up zero. 4%. Home improvement retail is the best sub-sector to get into during tough times. It increased by 14.8% on average. But metal and glass containers plus shoes weren’t bad either, up 13.3% and 12% respectively.

The best and worst industries in a recession

Source: CFRA, S&P Global Market Intelligence

Tech Stocks Thrive During a Recession?

Some of the individual S&P 500 stocks also held out during the downturn. If you not only want to endure the recession but also want to make money, then you will want to consider cloud security company F5. Stocks have soared more than 77% in the past three recessions.

And stocks can do even better when the economy is down. The stock soared nearly 190% during the eight-month recession that finally ended in November 2001. This surpasses the S&P 500’s 8.2% drop during that time. It’s important to note, though, that the S&P 500’s decline during a recession was 57%, Stovall said. Also keep in mind that stocks are struggling this year so far. It is down more than 38%.

Another big winner of the past three recessions has been another information technology company: Tyler Technologies. The company makes management software for the public sector. Stocks have risen more than 63.6% on average over the past three recessions. But like F5, the stock is struggling this year: down 39.9%.

Promote economic recession

But at least one recession-resistant stock, auto parts company AutoZone, is thriving this year. Shares are up nearly 21% this year as consumers buy parts to keep their old cars running. Stocks have risen more than 63% on average over the past three recessions. That’s the second gain of any current S&P 500 stock.

Undoubtedly, the S&P 500 fell the most before the recession started. Stovall said the S&P 500 fell from 7% to 57% in about seven months before previous recessions.

And if a recession hits, don’t assume the Fed will bail out your stocks. “The risks that the Fed may need to do more remain high and that’s why the economy needs to move towards a recession,” says Edward Moya of Oanda.this is next Depression however will not be rescued by rapid Fed easing or a fiscal response as that would introduce inflationary risks.” ​ ​​​​​​​​​​​​​​​​​

S&P 500 stocks beat recession

In the last three recessions since 2000

Source: IBD, S&P Global Market Intelligence