In How to protect your Money Now (April 2008), we cited 12 stocks that we thought would hold up well during hard times. Our picks in two industries -- drugs and energy distribution -- did just that. But our other choices sank beneath the waves.
In all, the dozen lost an average of 35% (including dividends) through February 6, edging Standard & Poor's 500-stock index by less than one percentage point. Teva Pharmaceutical (symbol TEVA) lost just 8% over the period, reinforcing our belief that this is a stock worth holding for years (see 7 Blue Chips to Hold Forever). Drug giant Eli Lilly (LLY) fell 22%, a decent showing. Royalty trusts San Juan Basin (SJT) and Cross Timbers (CRT) and pipeline operator Magellan Midstream (MMP) surrendered 26%, on average. The big losers were Dow Chemical (DOW), DuPont (DD) and Whirlpool (WHR), down 70%, 43% and 59%, respectively.
Not all of our picks were disasters. We suggested hedging your bets with Hussman Strategic Growth fund (HSGFX). It lost just 6%. Best of all was our recommendation of Prudent Bear (BEARX). The fund, now called Federated Prudent Bear, gained 22%.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Outside of Treasuries, bonds weren't much of a haven for investors over the past year. Our safest pick in Bond Funds Reduce Risk (April 2008), Fidelity Advisor Government Income (FVITX), returned 6.1%, thanks to the big rally in Treasuries. Three of the other bond funds we labeled "safe" held their losses to less than 1%. They are Dodge & Cox Income (DODIX), Harbor Bond (HABDX) and TCW Total Return (TGLMX). A fourth, Vanguard Inflation-Protected Securities (VIPSX), lost 5.1%, but we think its built-in inflation shield will prove a tremendous advantage in the years ahead.
Among municipal-bond funds we spotlighted, Vanguard Short-Term Tax-Exempt (VWSTX) returned 3.4%, and Fidelity Intermediate Municipal Income (FLTMX) gained 2.1%. But the riskier T. Rowe Price Tax-Free High-Yield (PRFHX) dropped 17.4%.
-
The Stoic Retirement: Ancient Wisdom for Today's RealityA "Stoic retirement" doesn't mean depriving yourself. It's a character-based approach to life and aging that can bring calm and clarity.
-
My Teen Crashed His Car and Now Our Insurance Has Tripled. What Now?Dealing with the costly aftermath of a teen car accident is stressful. Here are your options for navigating it.
-
11 Outrageous Ways To Spend Money in RetirementWhether you have excess cash to spend or want to pretend, here’s a look at 11 ridiculous ways retirees can splurge.
-
What the Rich Know About Investing That You Don'tPeople like Warren Buffett become people like Warren Buffett by following basic rules and being disciplined. Here's how to accumulate real wealth.
-
How to Invest for Rising Data Integrity RiskAmid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
-
What Tariffs Mean for Your Sector ExposureNew, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
How to Invest for Fall Rate Cuts by the FedThe probability the Fed cuts interest rates by 25 basis points in October is now greater than 90%.
-
Are Buffett and Berkshire About to Bail on Kraft Heinz Stock?Warren Buffett and Berkshire Hathaway own a lot of Kraft Heinz stock, so what happens when they decide to sell KHC?
-
How the Stock Market Performed in the First 6 Months of Trump's Second TermSix months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
Fed Leaves Rates Unchanged: What the Experts Are SayingFederal Reserve As widely expected, the Federal Open Market Committee took a 'wait-and-see' approach toward borrowing costs.
-
Fed Sees Fewer Rate Cuts in 2025: What the Experts Are Saying
Federal Reserve The Federal Reserve cut interest rates as expected, but the future path of borrowing costs became more opaque.
