While rushing to sell reliable stocks isn’t the best choice, it’s important to embrace a buy-and-hold mentality with solid companies. A long-term approach can help investors navigate uncertainty. These are some of the stocks that can minimize your losses if the stock market falters.
American Express (AXP)
People will continue to use their credit and debit cards in any economic cycle. American Express (NYSE:AXP) has more insulation than other credit card stocks thanks to its 19.5 P/E ratio. Leadership’s plans to grow revenue by 9% to 11% beyond 2026 along with EPS growth hovering in the mid-teens should lead to more long-term gains.
American Express delivered on its expectations with 11% year-over-year (YOY) revenue growth in Q1 2024. Net income increased by 34% YOY which was a pleasant surprise for investors. Also, the fintech firm’s customer base is getting younger. More than 60% of its new cardholders were Millennials or Gen Z consumers. Those two cohorts contributed to the firm’s 3.4 million card acquisitions in the quarter.
Moreover, the stock has almost doubled over the past five years and offers a 1.18% dividend yield. The company’s dividend growth rate has been an annualized 10.51% over the past decade. Also, American Express recently announced a 17% dividend hike.
iShares Gold Trust (IAU)
Gold tends to perform well during economic uncertainty. It’s a limited resource that is essential for society. While it’s easy to think of gold as something you use for jewelry, it has plenty of uses. It’s used in dentistry, smartphones, aerospace equipment and other resources.
Since gold is valuable and continue to retain high demand, its price increases alongside inflation. The inflation hedge has offered viable insulation against market uncertainty, and the iShares Gold Trust (NYSEARCA:IAU) offers direct exposure to the commodity. The fund offers exposure to gold prices rather than giving investors a basket of gold mining stocks.
IAU has outperformed the S&P 500 over the past five years. The trust is up by 81% during that span. It’s also up by 14% year-to-date (YTD) and was flat in 2022. Many indices dropped considerably in 2022, especially tech stocks. IAU can give your portfolio more protection than most investments if the market goes through a meltdown.
Exxon Mobil (XOM)
Exxon Mobil (NYSE:XOM) recently missed on earnings and is flat over the past year, despite at 15% YTD gain. However, the same stock surged by more than 80% in 2022.
If the stock market goes through a sharp correction, it will likely be a repeat of 2022. Inflation roars back, interest rates remain high and consumer spending faces more pressure. But people will still have to pump gas into their vehicles. Exxon Mobil is one of the best stocks for an oil shortage. Most stocks will lose value in that scenario, but XOM is an exception.
It’s possible that a high supply of oil keeps prices in check. XOM is a solid defensive pick and offers a 3.22% yield. You will get plenty of cash flow while you wait. Although Exxon Mobil missed its recent earnings, the stock is up by 15% YTD. That’s better than the S&P 500 and the Nasdaq Composite.
On the date of publication, Marc Guberti did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.
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