Safety is a relative word. What one investor considers safe, another may find too risky.
However, there are some stock sectors investors have looked to in troubled times as a safer haven than the general market.
No matter what the economy is doing, people still must eat and pay for utilities.
Won’t Stop Buying
You can think of other goods and services that the public isn’t going to stop buying, even in a recession - toilet paper is the classic example.It is dangerous to assume that every company in these safe sectors is also a safe investment during tough times.
Investors should take a close look at individual companies before making decisions - not every consumer paper-goods company is a good investment.
How do you decide which companies to consider?
Look for a consistent pattern of earning across past periods of economic uncertainty.
You can do this on most financial sites.
A quick check using Yahoo’s stock screener found 15 utilities with a five-year earnings growth of over 25 percent.
This is a way to get started with finding investment candidates. The next step is a more thorough analysis, but screens help you narrow down the field.
