Fear is running high in the stock market and for good reason. Storms are brewing in the global economy, and the six year U.S. bull market is in jeopardy. Take refuge in these four stocks to protect your wealth if the market turns south.
It wasn’t a crash or cyber attack that shut down the New York Stock Exchange for close to four hours last week, but a technical glitch. I’m not sure whether that’s reassuring or not, however.
Regardless, there’s plenty to worry about in the investing scene and the fact that the largest stock market in the world goes offline amidst a week of rising global uncertainty should raise some red flags. This comes as the stock market is well into its sixth year of a bull run, so everyone is on edge already.
Adding fuel to the fire is the fact that China’s stock market is in shambles, with over half the companies having suspended their stocks from trading. The securities regulators can’t seem to stop the hemorrhaging, having banned major shareholders from selling shares for at least six months. Still the Shanghai index is down close to 20% over the last three weeks.
Even the beaten down oil trade isn’t working, and this is amidst a summer driving season when demand should be highest. West Texas Intermediate crude has fallen close to 20% over the last three weeks. But avoiding oil isn’t enough, the entire commodity space is on pins and needles.
This pressure can once again be traced back to China and Greece. An economic slowdown in China is bad news for oil demand and the threat of a Greece exit from the eurozone has the entire European continent on its heels. In fact, commodities in general are in a very uncertain territory. China is the number two buyer of oil in the world, but the number one buyer of industrial metals. And even with Greece potentially staying in the eurozone, there’s still a lot of uncertainties over the long-term fix.
With all this, there’s already been a flight to safety, as investors flock to U.S. government debt, forcing down Treasury yields. But there’s still safety to be found. Notably, among high and stable dividend payers.
