Walmart, P&G are the Dow’s safest stocks when markets get wild

Investing


Volatility has come back with a vengeance, but there are some of the stocks that won’t turn your stomach while the rest of Wall Street is on a roller coaster.

CNBC ran a study using analytics tool Kensho to find Dow Jones industrial average stocks that held up the best when the Cboe Volatility index, or VIX, pops more than 5 percent in one day. Theoretically, these likely would be the stocks that would hold up the best when the market sells off and volatility spikes.

The analysis showed that Walmart, Procter & Gamble and Coca-Cola fall less than 0.75 percent in those instances of VIX spike days.

Other stocks that hold up nicely during a volatility surge include Johnson & Johnson and McDonald’s. Both stocks average a return of negative 0.77 percent when the VIX jumps more than 5 percent in one session.

Worries of rising inflation have sent interest rates higher recently, rattling investors and giving new life to stock-market volatility. Last week, the Dow, S&P 500 and Nasdaq composite dipped into correction territory. The 10-year note yield hit a four-year high earlier this week.

In the last week, the Dow has fallen about 1.8 percent. Meanwhile, Walmart, Procter & Gamble and Coca-Cola are down 1.3 percent, 1.4 percent and 1.6 percent, respectively, holding true to their past history of outperformance during these volatile times.

To be sure, past performance is not indicative of future returns and should never be the only reason to buy or sell a stock.

Disclosure: NBCUniversal, parent of CNBC, is a minority investor in Kensho.



Source link

Products You May Like

Articles You May Like

Companies should take a stand on gun control
RBS reports an annual profit for the first time in a decade
Venezuelans report big weight losses in 2017 as hunger hits
Ethereum creator Vitalik Buterin warns about cryptocurrency investment
Self-made billionaires: China’s 10 richest billionaires

Leave a Reply

Your email address will not be published. Required fields are marked *