The Bear Mauls Our Stock Picks

But a bear fund we suggested shot out the lights.

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.

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.