They would be our first targets for selling. Because they drive popular market indexes, avoid indexing strategies. As always, market downturns create buying opportunities in quality companies. In recessions, interest rates tend to fall, benefiting bondholders and equity positions, which afford strong income flow. Many attractive REITs afford strong income flows, yielding on average 8.71 percent.
Utilities traditionally do well in bear markets.
Smaller insurance companies which feature quality bond portfolios will benefit from lower interest rates. In bear markets, certain groups and sectors traditionally tend to shine. They include precious metals, which already have begun to move higher, and certain consumer staples, such as grocery chains, drugs, cosmetics and the like. Staples, such as food and medicine, are required for everyday life, have built-in sales and generate more consistent earnings. Smaller and mid-cap stocks have been neglected recently, while larger stocks outpaced the market.