2 solid stocks to buy for long-term bear market opportunities

Today’s episode of Full Court Finance at Zacks dives into the economy and the stock market with the S&P 500 now officially in a bear market. Despite the uncertainty and selling, investors with a long-term outlook might consider buying stocks, as bear markets present many opportunities.

A week ago, May consumer price index data was warmer than expected and showed no signs of slowing inflation. The Fed quickly changed course and raised its key rate by 0.75% on Wednesday, instead of the 0.50% hike that Wall Street had projected before the CPI was released. The 75 basis point hike marked the biggest increase since 1994 and showed the central bank’s determination to try to cool the economy and prices.

The market responded by sending the benchmark S&P 500 into a bear market for the first time since the Covid selloff. Stocks then fell deeper after the Fed hike and Wall Street is now awaiting second-quarter results and, more importantly, indications of what’s next, with gasoline prices above $5 a gallon a month. national scale.

Given all the very real economic headwinds, especially rising prices, consumer confidence is down sharply. This will likely translate into a slowdown in spending over the next few months, which could go a long way to curbing inflation in the consumer-driven US economy. And the higher rates are already being felt in the housing market.

Some investors might be on the sidelines right now. But bear markets are very common and staying in cash comes with an inflation tax of 8.5%. Those who can handle the additional downside potential might instead consider buying strong, dividend-paying stocks poised to grow for years to come in almost any economic environment. Additionally, valuations are starting to look more attractive by the day.

The first stock on the list today is Analog Devices, Inc. ADI. As its name suggests, ADI is a leader in the analog semiconductor space and has provided optimistic guidance in the face of continued supply chain bottlenecks and a slowing economy. Analog Devices continues to benefit from larger secular changes in the economy such as electrification and automation. ADI currently lands a Zacks No. 1 rank (Strong Buy) and is trading at ten-year lows in futures earnings.

Public Storage PSA is a self-storage REIT that operates in approximately 40 states. Public storage has been gaining momentum for years as Americans continue to buy more and more stuff. And even in times of economic downturn, people find it hard to get rid of all their “stuff.” Public Storage’s stock has more than doubled the S&P 500 over the past 20 years and Wall Street remains rather high on PSA.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Michael J. Chiaramonte