Stocks continue to make new highs, and new stimulus payments are beginning to arrive in bank accounts, suggesting that even more money will pour into the market. However, the spigot will be shut off sooner or later, and the market will crash once more. It’s a horrible investment strategy to try to time entry and exit points, so it’s best to pick stocks that can do well regardless of market conditions. Here are three companies that should perform well when the sun shines and hold their own if (or when) the market falls apart.
Getty Images is the source of this image.
Amazon.com
Early in the COVID-19 epidemic, e-commerce behemoth Amazon.com (NASDAQ:AMZN) revealed the critical nature of their business. The economy was shut down as well, with the exception of a few critical enterprises that were allowed to profit during the crisis.
One of them was Amazon, which demonstrated how important its online business strategy was to everyone’s existence. Many people were able to get through the early phases of the coronavirus outbreak thanks to the ability to order supplies and have them delivered to their door when they weren’t supposed to go out.
Amazon’s cloud service also proved to be a lifeline for many firms that were unable to open their doors. They were kept up and running thanks to Amazon Web Services, which serves as the backbone of many firms’ internet infrastructure.
Expect individuals and businesses will turn to Amazon.com for goods and services in the event of a future market crash.
Axon Enterprise is a company based in the United States.
Even in the cities that advocated the most for police defunding, law enforcement remains an important part of society. Last summer, Portland, Oregon, cut $15 million from its police budget, resulting in an increase in violent crime. It is now seeking $2 million to re-establish proactive policing teams that were previously disbanded.
More departments than ever are providing their officers with less-than-lethal weapons and body cameras to safeguard both cops and residents, and Axon Enterprise (NASDAQ:AXON) is by far the largest provider of both. It just received its highest order yet for its Taser 7 stun gun, with sales up 61 percent in the fourth quarter.
Tasers, body cameras, and digital evidence management systems from Axon are all seamlessly linked, and the company has also developed a new command center product with drone surveillance capabilities.
Crime tends to surge during times of economic duress, making Axon Enterprise’s equipment even more important if the market’s good times come to an end.
Netflix
When you don’t have much money to spend on entertainment, what else can you do but stay on the couch and watch Netflix (NASDAQ:NFLX)?
Netflix’s streaming video service is remains under $15 per month, even after raising its fees for the fifth time in the last seven years, making it an affordable form of entertainment for the whole family. And, while it hasn’t yet achieved saturation in the United States, the main growth potential are overseas, where it has lots of room to expand its 204 million paying members.
Netflix is a financially secure company with regular revenue sources that haven’t reached their peak yet. It told investors earlier this year that it no longer needs outside financing to fund its growth, and that with a stable of hit original programs to keep consumers interested — it recently received 35 Academy Award nominations, more than any other movie studio or competing streaming service — it can easily weather a prolonged market downturn until things improve again.
Searching for a silver lining
Market corrections are inevitable. And downturns are no joy for anyone; people’s portfolios and livelihoods are seriously harmed. As a result, investors must do everything possible to safeguard themselves.
To withstand the storm, you might put together a portfolio of staid, uninteresting equities, or you could choose a portfolio of winning businesses that should do well — or perhaps thrive — in such a disaster. It could be the most effective strategy to ensure you’re in good shape when the markets recover.
This post is the author’s own view, which may differ from a Motley Fool premium advice service’s “official” recommendation position. We’re a mishmash! Questioning an investing theory, even our own, encourages us to think critically about investing and make decisions that will make us smarter, happier, and wealthier.
Continue reading
