A market correction can be scary for many investors, especially if it means their biggest nest eggs may take a hit. However, hedging is the best strategy to minimize damage and practice effective risk management within your Investments. Buying proven hedge stocks can ensure you still hold profitable shares even in the worst economic or market conditions.
These three hedge stocks have proven time and time again their ability to withstand less than favorable economic conditions. If you are fearing an upcoming Market correction and are scared for your current portfolio, these stocks will make solid additions so you can turn a profit with a much more secure guarantee.
Let’s learn about the stocks’ diverse holdings and proven ability to continue solid, consistent growth throughout recessions and previous corrections.
Berkshire Hathaway (BRK.A, BRK.B)
Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK.B) is a massive conglomerate that holds shares of many different companies across a diverse list of industries, such as tech, finance, healthcare and energy. Warren Buffet and his trusted group of investors have an excellent track record of overcoming adversity and returning excellent value to shareholders.
The most vital edge Berkshire Hathaway has against a market correction is its diversity. Berkshire Hathaway has several more to cover the slack if one sector gets hit hard with price reductions. In addition to Berkshire’s shares, it owns insurance giant Geico, which has proven to be excellent in resiliency to adverse market conditions.
Some of Berkshire Hathaway’s largest investments, including Apple, Coca-Cola and Bank of America, are projected to see solid growth for the remainder of this year and into the next. Apple, the most significant portion of Berkshire’s holdings, is expected to reach almost 10% earnings growth in 2025.
If Apple loses out to Nvidia or sees other difficulties, Bank of America is also projected to grow similarly. This diversity allows for an insurance that offers an excellent way for investors to hedge against any coming corrections.
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG) is as steady as it comes regarding long-term growth stocks. As one of the most popular consumer staple companies, Procter & Gamble is resilient to downturns with products that never go out of demand. Some famous brands that Procter & Gamble owns include Tide, Old Spice and Charmin.
After recently hitting an all-time high in stock price, Procter & Gamble has proven its potential to resist economic struggles. In the current times, the arch enemy of many has been inflation. However, Procter & Gamble has an excellent response to overcoming this challenge, with a growing margin due to higher prices on its essential products.
Procter & Gamble is more expensive than ever but is valued reasonably, given its most recent performance and ability to withstand even the worst conditions. You are paying for the security. As a hedge stock, there is no doubt that Procter & Gamble will protect you and ensure you keep your profit even when other stocks in your portfolio fall.
Not to mention the company’s extraordinary dividend history. Procter & Gamble has reduced its share count by more than 12% and has increased its dividend for almost 70 years. It will hold up well in case of a correction and is also an excellent dividend stock.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is one of the leading tech companies in the world and undoubtedly holds a spot at the top of best hedge stocks. The company has some of the most cutting-edge software, services and hardware in the world today.
Microsoft has a long history of incredible performance and continues to reach new heights. Revenue increased by 17% in the previous quarter, and operating income increased by 23%. Microsoft’s revenue is distributed evenly throughout its three main segments: productivity and business processes, cloud and personal computing.
Microsoft’s strength as a hedge stock is its diverse customer base. Many of its demographics are comprised of businesses that continue using Microsoft’s products and services even during economic or market crashes.
With a proven track record of overcoming poor economic conditions, Microsoft is an excellent stock to buy in preparation for a market correction.
On the date of publication, Joel Lim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
