A lot of investors fear bear markets and the potential losses they bring but as long-term investors, we know it’s inevitable that we will face a downturn at some point.
As such, for investors who fear volatility, it may be wise to diversify and anchor a portfolio with companies that could do well in a recession. With that in mind, here are three stocks that I would buy to beat the next bear market:
Bapcor Ltd (ASX: BAP)
During a downturn, it’s likely that many consumers will choose not to buy a new car and continue using their old car. That car will need more frequent repairs and maintenance which works to the benefit of Australia’s premier provider of automotive parts, Bapcor.
Bapcor also has a strong balance sheet that could help it weather the storm during a recession.
Brambles Limited (ASX: BXB)
During a recession, many companies opt to cut costs as an alternative to protecting profits through revenue growth. Brambles is a global leader in its industry and with economies of scale that lead to significant cost advantages, it’s well positioned to outperform its competitors during a downturn.
The company’s global reach also makes it a good hedge against downturns that are specific to Australia.
InvoCare Limited (ASX: IVC)
They say nothing is certain except death & taxes and as the Australian market leader in funeral services, InvoCare’s revenues are fairly stable and reliable. If anything, the industry is likely to continue growing as the population grows and InvoCare could also benefit from consolidation within the industry.
With a PE ratio of 15, InvoCare also looks like good value given the overall quality of the business.
While I like the three stocks above, if you are looking beyond the next recession then I highly recommend that you learn more about this new technology.
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The Motley Fool Australia owns shares of and has recommended Bapcor. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.