What stocks might outperform in a recession?
Firstly, as we all know and seldom heed - past performance does not indicate future results.
Caveat considered, let’s look at what totally blew it out of the water the last time around“Last time around” can be defined two ways. The Great Recession started in December 2007 and ended 18 god-awful months later in June 2009.
The bear market predated the Great Recession. The market tippy-topped October 9, 2007 and slid 56 gruesome percentage points, hitting the low on March 5, 2009.
As we’ve discussed previously, stock market declines almost always foreshadow recessions – and the big one was no exception.
There’s a lot of weird hardly traded names that did really well during this period. (Antigenics anyone? Up 700% !!!).
Another name that did remarkably well is Netflix (ticker NFLX). How well you ask? Oh just up a measly 62% during the bear market and 79% during the Recession. For real.
Too risky? Try a boring old bond ETF like the IShares 20+ Year Treasury Bond (ticker TLT) up 25% during the bear market and 7% during the Recession.
We don’t know exactly when the tide will turn or what will pop when it does. We’re just doing our research and getting our ducks lined up.
Weekly Update through June 15, 2018 The S&P 500 added 7bps, even as the Dow Jones lost -84bps, the Russell 2000 added 72bps the Nasdaq gained 1.34%
As for US bonds, they added 13bps.
Globally, the MSCI World Index lost -12bps and the Barclays Global Aggregate Bond Index declined -30bps.
The Euro Stoxx 50 added 1.81% in local-currency (Euro) and 36bps in USD. Meanwhile, the Topix added 43bps in local-currency (Yen) and declined -56bps in USD
