Think about all that happened in 2020. A global pandemic that caused the first U.S. recession in more than a decade. Massive unemployment. A contentious presidential election. Control of the U.S. Senate in doubt. And yet the S&P 500 index jumped 16%…
How could stocks perform so well in the midst of such chaos? There’s a simple reason: Investors are always looking ahead. The market went up because they expected that the storms would calm in the not-too-distant future. It’s understandable, then, that many (including me, by the way) have projected an extension of the bull market under the incoming Biden administration.
The reality, though, is that no one knows for sure what’s next on the horizon. It’s quite possible that the stock market will go down in 2021 instead of up. The good news for investors is that there are solid stocks that should still perform well if that happens. Here are three stocks you can buy for a potential Biden bear market.
1. Dollar General
Few stocks are as resilient during tough times as Dollar General (NYSE:DG). Shares of the discount retailer soared 35% last year.
The COVID-19 pandemic actually boosted Dollar General’s sales. Its stores carry the staple goods that are needed regardless of what’s going on in the world. Customers shopped at Dollar General because its stores are conveniently located (75% of Americans live within five miles of a Dollar General store) and its prices are low.
Those advantages aren’t temporary ones. And Dollar General is working to increase its attractiveness to consumers. For example, the company is rolling out DG Pickup, where customers can buy on an app then pick up products in stores. It’s also launched new Popshelf stores that target higher-income customers.
Don’t think that Dollar General is just a bear market play, though. Between 2014 and 2019, years when the U.S. economy was steadily advancing, the stock rose nearly 160%.
2. Brookfield Renewable
Brookfield Renewable (NYSE:BEP) (NYSE:BEPC) is another stock that performed really well during the turbulence of 2020 with its shares skyrocketing 74% higher. That followed an even more impressive gain of 80% for the renewable energy stock in 2019.
Can Brookfield Renewable keep its momentum going even if there’s a Biden bear market? Absolutely. Consider that renewable energy production increased during the economic downturn last year while overall energy production fell. President-elect Joe Biden has promised to put the U.S. on a path to significant carbon emission reduction. That’s great news for Brookfield Renewable, one of the world’s leading renewable power companies.
The reality, though, is that Brookfield Renewable would likely deliver solid gains even if Biden wasn’t a champion of clean energy. Wind and solar are…
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