Ben Gran, The Motley Fool
5 min read
The S&P 500 index (SNPINDEX: ^GSPC) has had a better-than-average year, with a total return of about 15% year to date. But many investors worry that a bear market is right around the corner.
There are a few big risks facing the stock market. Higher bond yields are pushing up borrowing costs for businesses. The Fed remains committed to fighting stubbornly high inflation. And major tech companies are borrowing hundreds of billions of dollars to pay for the development of artificial intelligence (AI) tools that have excited investors but are not guaranteed to pay off.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
What if the stock market crashes in 2027? How should you invest today if a bear market is coming?
Let’s look to the lessons of history and see which stocks tend to do better during bear markets. One low-cost exchange-traded fund (ETF) could put some of the best so-called “recession-proof stocks” in your portfolio.
Which stocks are good in bear markets? Healthcare, energy, consumer staples
During a strong bull market like the one we’re in now, investors are hopeful about the future. They’re willing to put money into (so far) unprofitable ideas and companies with high growth potential. That often means tech stocks. The tech-heavy Nasdaq-100 index is up about 20.4% in 2026. But if a bear market arrives, some of those high-flying tech stocks tend to get punished the hardest.
Here’s what happened in 2022 during the most recent bear market. The Nasdaq-100 was down about 32.4% that year, and the S&P 500 (which also includes many tech majors) declined by about 18.1%. Some sectors of the economy stood up to the downward pressure of the bear market. Energy, utilities, healthcare, and consumer staples stocks did much better in 2022 than the broader stock market indexes.
How should you invest now for a bear market in 2027? Consider SCHD.
Stocks that do better during bear markets and recessions are also called “defensive stocks.” They don’t always grow as fast when times are good, but they can be steadier and more resilient to “defend” your investments when times are hard. Energy, utilities, healthcare, and consumer staples are often among the stocks that do better in bear markets because these sectors are more “must-haves.” Even if the economy is struggling, people keep paying for gas and heating their homes. They keep buying pharmaceuticals and everyday consumer items like groceries and shampoo.
