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The market is in a major funk right now.

A war in Europe, the highest inflation in 40-years, and COVID lockdowns in China have pushed US stocks into a bear market. And if the 2s and 10s yield curve is right again, a recession is coming next.

That puts the Federal Reserve in a tight spot. The central bank is currently raising interest rates at a rapid pace to fend off an inflationary spiral. But despite tightening the monetary policy screws faster than previous cycles, inflation continues to run rampant. 

And if you look at the data, most investors believe the Fed will fail at its attempt to execute a soft landing. 

But that’s doesn’t mean you should sell your entire portfolio and head for the hills.

How You Should Navigate the Panic of 2022

The classic impulse for most novice investors in a bear market is to divest their portfolio and go to cash. Investors can’t stand the sight of their portfolio falling and emotionally sell at the worst possible time.

The fact is that the time to sell has come and gone. The S&P 500 is already in a bear market, while the tech-heavy Nasdaq has now fallen -30%. That’s how much the index fell during the height of the COVID-19 Crash.

Plus, market downturns often pose a great opportunity to buy pieces of the world’s best businesses at favorable prices.

The trick is knowing which stocks to buy.

The Stock Market is Not the Economy

If you follow my TikStocks, you know I’ve been ranting and raving about how the stock market is NOT the economy. 

Though even the highest-quality stocks can sink during a recession, that doesn’t necessarily mean the overall market can’t perform well. In fact, the S&P 500 has historically risen by an average of 3.6% during each past recession, proving that there are ways to buy wisely when the economy tanks.

While cyclical stocks are usually the hardest hit during periods of contraction, certain market sectors are relatively immune from the market’s volatility. These stocks are recession-resistant and can shield your portfolio from extreme economic turbulence. 

Here are three recession-resistant stocks to consider buying during this bear market:

Kroger Co. (KR)

Even when recessions hit and the economy contracts people still need to eat and buy basic household products. That’s is why consumer stocks like Kroger are typically safe bets. As prices soar, people naturally downsize from restaurant dining and instead turn to the grocery stores and packaged food makers. 

Aside from its instantly recognizable name, Kroger operates nearly 3,000 supermarkets and is the largest independent grocer in the country. Unsurprisingly, its earnings soared throughout the Covid-19 pandemic, while its revenue exceeded analyst’s expectations in Q4. 

Since the start of 2022, Kroger’s stock is up about 28%, crushing the S&P 500’s 18% drop.  While other industry titans like Walmart are out-growing the Cincinnati-based retailer and winning market share in the fresh food niche, Kroger still pays a higher dividend yield at 1.57%. 

Other reliable stocks include Procter & Gamble (PG), PepsiCo (PEP), and Tyson Foods (TSN)
 

Sun Communities (SUI)

‘Home’ is a word we know well thanks to the pandemic. Even after lockdowns relaxed, most of us remained static, introverted, and married to our humble abodes for another year.  

But ‘home’ means different things to different people. It can include houses, apartments, and even something called manufactured home communities (otherwise known as trailer parks).

Every day, 10,000 Boomers are retiring with nowhere near enough money. But there’s a solution: 60% of US households own a home. And Duke University economics professor Charles M. Becker thinks many will sell their homes and move into—you guessed it—manufactured homes.

That’s where Sun Communities comes into play. The company is the largest provider of manufactured homes in the US. While most retirees simply cannot afford their dream house on the beach. Many will turn to manufactured home parks as a back-up plan.

Everyone should be taking advantage of this trend. It’s a no-brainer. With stock market volatility on the rise, you want to add safe and stable companies to your portfolio.
 

Abbot Laboratories (ABT)

It’s obvious why the health care sector outperformed during the global pandemic. But with the shockwave impression Covid left on the world, diversified health products companies like Abbot Labs are sure to see more future growth. Neither governments nor investors want to see another pandemic, especially considering how much worse it could have been. 

Abbot Labs sells its broad portfolio of medical devices, diagnostics, nutrition, and generic medicines to 160 countries. In 2021, it grossed $42 billion in total revenue. Though the company has been off to a rough start this year – suffering the effects of supply chain shortages and a recall of powder formulas – it’s still one of the leaders in the healthcare space. 

The company has capitalized on the boom in COVID testing sales. But with a steady stream of revenue from its structural heart products, a robust product pipeline, and plenty of acquisition targets in this depressed market environment, large cap healthcare players like ABT are a great place to ride out the bear market.

Other reliable healthcare stocks include Johnson & Johnson (JNJ), Pfizer (PFE), and CVS Health (CVS).
 

Bottom Line:

Fears of an economic recession are looming large for myriad reasons. But the stock market isn’t the economy, and you can still make safe bets by looking to reliable sectors like health care, housing, and retail.  In my opinion, Kroger, Sun Communities, and Abbot Labs offer some of the best risk-to-reward trades offs in this challenging market.