The recent spike in volatility, and pullback in the overall market has left a lot of investors nervous about where to invest their money. While some analysts argue that the market’s correction earlier in the month is actually healthy for the bull market, others suggest that equities are still overpriced, and the market has additional downside risk.
The reality of the situation is that no one can predict the future of the market. The underlying fundamentals of the economy are strong. Unemployment is low, the housing market remains strong, and wages are starting to rise. While this all sounds great, the fear is that the economy is showing too much strength, which will force the Federal Reserve to lift rates quicker than previously expected.
The Federal Reserve kept rates near-zero for years to spur economic growth, but rates have been rising over the last year, and while they will continue to rise, it is important to remember that they remain very low on an historic basis, and even if we do see three rate hikes this year, as expected, rates will still be very low, and should not have too material of an impact on the health of the housing market or the overall economy.
What will happen will be some money transferring out of equites and into fixed income assets as yields rise, but with rates still so low, it is unlikely that the market will turn bearish.
The only thing that is for certain is that volatility will remain in the market moving forward, which leads to the question of where to invest at this point in time. In order to safeguard your investments, the best approach is to look for stocks that are good investments in any market condition.
Here are five such stocks.