2 All-Weather Stocks To Prepare For The Unexpected

Volatility has resurfaced in the market, which means it’s time to protect your portfolio. These two all-weather stocks should do the trick.

Last year illustrated the unpredictability of the future. Nobody saw a global pandemic coming. How could they? After that, few predicted a market boom for the ages beginning last March.

For investors, 2020 should serve as a stark and valuable reminder to expect the unexpected, at least with part of your portfolio. You never really know what lurks around the corner. Which is why you need a few all-weather stocks in there for protection. More on those in a minute.

Deciphering the unexpected requires answering an important question: What does the market currently “expect”? The market anticipates wonderful things for 2021. Investors tend to look ahead, and the nearly 20% market spike since early November is irrefutable evidence of a very positive outlook.

The vaccines promise to end the pandemic. The removal of lockdowns and restrictions will unshackle the economy into a full recovery. A booming economy will combine with rock bottom interest rates and trillions in stimulus to create an ideal environment for stocks. At least, that’s what is expected.

I don’t want to throw cold water on the optimism. I believe in the economy. It has consistently proven to be far more resilient than expected through the pandemic. I think the economy will boom when things truly open up. It’s the “open-up” part that invites more skepticism. You never know.

Investors need to prepare for the possibility that the New Year won’t unfold as currently expected. Even if it does, the market may have gotten ahead of itself in the near term. The S&P 500 has soared more than 70% since last March. Stocks never go straight up for long, even in the strongest bull markets. A pullback is overdue.

Under the circumstances, it is worth considering a position in stocks that can thrive in virtually any scenario. Certain stocks tend to move independently of the market. And a select few of such all-weather stocks also have powerful catalysts to deliver a strong return even if current expectations don’t come to fruition.

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