Great stocks are those that perform consistently in spite of the volatility of the market. For the last 6 years, most of the big indices have performed more or less stably. Hence a market correction is expected anytime in the future. This could ring alarm bells for you as an investor, because market corrections are always accompanied by huge price slumps. Your favourite stocks may come crashing down right before your eyes, leading to huge losses for you. In order to safeguard yourself from all these, you should invest in safe stocks that maintain “status quo” irrespective of the market conditions. There are hardly few stocks that fall under this category. Some of them are discussed below:
Best business strategies and great control over investments
In the list of safe stocks, one name that comes to our mind first and foremost is Berkshire Hathaway (BRK.A, Financial) (BRK.B, Financial). This is one of the largest holding companies in the world and exercises control over some of the biggest companies. Founded by the one of the greatest investing brains, Warren Buffet, Berkshire Hathaway is the best stock in the “safe category”. It holds companies in diverse sectors like construction, cosmetics, beverages, insurance, furniture, apparel, fast foods, paints, candies, investments, railways and the like. These diverse businesses give Berkshire Hathaway the definite edge over its competitors. For the past 30 years, share prices have increased at an average rate of 18% every year. Though the growth rates have not been phenomenal, they have been consistent. Every year, the company has managed to return reasonable returns to its shareholders and hence is considered to be one of the safest stocks not only for 2015 but for many more years to come. Stock movement of Berkshire Hathaway for the last few months is seen below:
Focus on small and mid-sized businesses
The next in line in the safe stocks category is Paychex (PAYX, Financial), a company that provides payroll and all human resources services to its clients who are mostly small and medium sized businesses. Catering to the needs of small businesses is indeed a niche area and Paychex has immense growth potential in this category that will come in handy in the coming years irrespective of the volatility of the stock market.
The US economy is growing at a steady pace and lots of jobs are being created currently. This has resulted in the mushrooming growth of many HR service providers in the market. However, Paychex is not intimidated by them because it caters to the reasonably large, mid-sized and small scale businesses, which gives it lots of options to fall back upon. The company is good to go for many more years to come provided the US economy stands to grow at a reasonable rate. Stock movement of the company for the last few months can be seen from the below picture:
Entertainment sector set to grow profusely
Walt Disney (DIS, Financial) is one of the safest stocks that are available in the market today. The media and entertainment giant has been posting great margins in all its segments in the last quarter of 2014. Though there are other big names in this sector like Time Warner (TWX, Financial) and Fox Entertainment (FOX, Financial), Walt Disney enjoys a clear edge over them in terms of diversified products, high-quality franchises and success of the movie making business.
Walt Disney has lots to look forward to in 2015 with as many as 12 blockbuster movies under its belt and the launch of a mega-level theme park in Shanghai. During the last year of 2014, it produced one of the major hits, “Frozen”. With the Star Wars series of movies coming up this year, Walt Disney is all set to earn huge revenues this year as well. Share price trend of the company is seen below:
Conclusion
The above stocks figure in this category because they have exhibited their capabilities in the past to stand tall in spite of the volatile condition of the stock market. These companies are so strong that their business strategies will stand them in good stead for the next 10 years at least.
