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2 Strong Stocks to Buy for Long-Term Bear Market Opportunities

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·3 min read
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Today’s episode of Full Court Finance at Zacks dives into the economy and the stock market with S&P 500 now officially in a bear market. Despite the uncertainty and the selling, investors with long-term outlooks might want to consider buying stocks because bear markets bring with them tons of great opportunities.

A week ago, May’s consumer price index data came in hotter-than-projected and showed no signs of slowing inflation. The Fed changed course quickly and on Wednesday raised its core interest rate by 0.75%, instead of the 0.50% hike Wall Street had been projecting prior to the CPI release. The 75-basis point hike marked the largest raise since 1994 and showcased the central bank’s resolve 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 waiting for second quarter earnings results, and more importantly, guidance for clues as to what’s next, with gas prices above $5 a gallon nationally.

Given all of the very real economic headwinds, particularly rising prices, consumer sentiment is down big. This is likely to show up in slowing spending in the coming months, which could go a long way in reeling in inflation in the consumer-driven U.S economy. And the higher rates are already ripping through the housing market.

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

The first stock up on the list today is Analog Devices, Inc. ADI. As its name suggests, ADI is a leader in the analog semiconductor space and it provided upbeat guidance in the face of ongoing 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 Rank #1 (Strong Buy) and trades at decade-long lows in terms of forward earnings.  

Public Storage PSA is a self-storage REIT that operates across roughly 40 states. Public Storage has been gaining momentum for years as Americans continue to buy more and more things. And even during economic downturns, people are hard-pressed to get rid of all their ‘stuff.’ Public Storage 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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