Stocks That Are Prospering in this Volatile Market Year
Not all stocks perform poorly during a tough year for the market. Some that you might consider yawners in more robust times actually hang in there and prosper.
For example, stock for the global health and hygiene company
Their success flies in the face of a brutal market.
The overall decline in the third quarter was 12 percent for the
"The good thing about this volatile market is that the financials have borne the brunt of the selling," said
The winning formula for a 2011 personal portfolio has been to underweight financials while overweighting defensive sectors. Sidestep financial stocks and you are likely to beat the market, Young counseled.
This cash-rich company with a solid balance sheet regularly increases its dividend and buys back its shares. It is, however, facing an increasing number of lower-priced private-label competitors, and its advertising spending is substantial.
Southern has consistently increased its dividend, which is one reason why its stock is widely held.
"If market volatility continues and the economy stays sluggish with crisis overtones, there definitely are some steady-eddy areas to look to within the market," said
The only downside to that game plan, Paulsen added, is that these groups won't be all that attractive if the economy really makes a turnaround.
Sanofi (SNY), a pharmaceutical giant that produces a wide array of drugs, has been a solid stock performer this year and is admired by Nichols. That
Sanofi's cash flow is strong enough to easily cover its debt expenses. Diabetes drug Lantus and antithrombotic treatment Lovenox are among its strongest performers, and it has a number of worthy late-stage drugs in its product pipeline. Success of the new drugs will be crucial because it faces some major patent expirations between 2011 and 2015.
Diversification in all of your investments should be an ongoing theme no matter what is happening in the economy, believes Paulsen. He'd include different types of stocks, Treasuries, high-yield bonds and commodities so that your personal holdings are positioned for anything the economy can throw at you.
"I don't care if you hate Treasury bonds -- you have to have some in your portfolio," said Paulsen. "I think they're terrible, but I have some myself."
Always keep some holdings in defensive areas, but realize that it also makes good sense to begin to buy some of the stocks "being thrown out the window," Paulsen said. Keep a basic portfolio structure that doesn't change significantly, but take some advantage of panics.
Since stocks that hold up in hard times are important, you might take a look at some others.
Procter & Gamble Co. (NYSE:PG), the world's largest consumer product manufacturer, is known for its Tide, Charmin, Pantene, Cover Girl and Iams brands. Sales in developing markets continue to grow. Strong cash flow is displayed in its dividends and share repurchases.
Not all of the stocks that hold up in a volatile market can be termed boring.
"Apple Inc. (AAPL) has managed to perform in a phenomenal way and recent market turmoil has had absolutely no effect on it," said Nichols. "The iPhone is so popular, and everyone is so excited about the iPhone 5 now."
So remember that when the market goes down, not all investments go down with it.
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