Here’s some food for thought: The stock market, as measured by the S&P 500 index, surged about 31.5% in 2019, followed by an 18.4% increase in 2020 — and at the time of this writing, it’s up a further 13.3%.
So what do you think — is it going to fall sharply in the near future?
The best answer to that question is that no one knows what the stock market will do in the short term. It may indeed drop, say, 25% in 2021 — or it may end the year up 20%…
You could sell many or all of your stocks just in case there’s a stock market correction, but if it doesn’t happen, you’ll likely end up losing out on gains while sitting on the sidelines. You would be engaging in “market timing,” which is not a great wealth-building practice.
It’s often best to just ride out any downturns, as great stocks will keep hitting new highs despite occasional drops.
But if you’re really worried about it and are a risk-averse sort, you might consider investing in some resilient companies — ones that can be seen as defensive plays.
It’s hard to get more resilient in the face of a recession than Kimberly-Clark (NYSE:KMB). No matter how the economy is doing, consumers will still be needing — and buying — toilet paper, diapers, paper towels, and tissues. (The stock encompasses many brands, too, including Scott, Cottonelle, Huggies, Viva, Kleenex, Kotex, Poise, Depend, Andrex, Pull-Ups, GoodNites, Intimus, Neve, Plenitud, Sweety, Softex, and WypAll, all of which hold the No. 1 or No. 2 market-share position in 80 countries.)
People did a lot of stockpiling of these products early in the pandemic, so more recent Kimberly-Clark sales have been less robust. Still, the company remains a solid long-term investment, as it keeps producing items that are always in demand — and cuts costs, too.
Kimberly-Clark is also…
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