In this article, we will take a look at the 10 Best Bear Market Stocks to Invest In Right Now.
A stock index is considered to be in a bear market when its closing price falls at least 20% from its most recent high. A correction is milder, with losses between 10% and 19.9%. A bull market begins once prices climb 20% from the bottom.
Hartford Funds reported that stocks fall about 35% on average during a bear market. In bull markets, they rise 112% on average. Since 1928, the S&P 500 Index has gone through 27 bear markets. Over the same period, there have been 28 bull markets, and the long-term direction has been upward. Bear markets also tend to move quickly, with an average duration of 289 days, roughly 9.6 months. Bull markets take their time, lasting about 988 days, or close to 2.7 years. The difference is noticeable when viewed over multiple cycles.
The report also points out that bear markets used to come around more often. Between 1928 and 1945, there were 12 of them, or one every 1.5 years. Since 1945, there have been 15, which works out to about one every 5.1 years. Around 42% of the S&P 500 Index’s best days in the last 20 years happened during bear markets. Another 36% came in the first two months of a bull market, before the recovery was obvious. It shows how hard it is to step in and out at the right time. Staying invested often ends up being the steadier approach.
The same report makes another point. A bear market does not always mean a recession is underway. Since 1928, there have been 27 bear markets but only 15 recessions. Markets and the economy often move together, but not always in lockstep. Analysts also note differences across sectors. Defensive areas like consumer staples, healthcare, and utilities tend to hold up better. Technology and financials, on the other hand, usually see more swings.
Given this, we will take a look at some of the best bear market stocks.
Photo by Scott Graham on Unsplash
Our Methodology:
For this article, we screened for companies in the defensive sectors like consumer staples, healthcare, and utilities. Preference was also given to companies with competitive advantages that are attractive relative to their historical or sector averages. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These companies are also popular among elite funds and analysts.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. The Clorox Company (NYSE:CLX)
Number of Hedge Fund Holders: 48
On April 21, Kaumil Gajrawala of Jefferies lowered the firm’s price recommendation on The Clorox Company (NYSE:CLX) to $139 from $151. It reiterated a Buy rating on the shares. He noted that Clorox is heading into a difficult second half. Geopolitical tensions, inflation, and continued share losses are weighing on performance. Category improvement remains limited. He added that Q3 organic growth is likely to come in slightly below expectations. FY26 EPS guidance could also be reduced. The focus, in his view, will be on further estimate cuts and commentary around the longer-term outlook.
On April 17, JPMorgan downgraded CLX to Underweight from Neutral. The firm also cut its price target to $99 from $117 ahead of the fiscal Q3 report scheduled for April 30. The firm expects category growth to stay below historical levels for some time. It pointed to “exogenous factors,” including pressure on lower-income US consumers. It also highlighted Clorox’s exposure to categories where private label competition is strong, particularly in trash bags and surface cleaning. In addition, the firm sees cost pressures from diesel and resins. Based on this, it believes there is downside risk to estimates and expects management to narrow its guidance range.
The Clorox Company (NYSE:CLX) is a multinational manufacturer and marketer of consumer and professional products.
9. The Southern Company (NYSE:SO)
Number of Hedge Fund Holders: 54
On April 21, David Arcaro of Morgan Stanley lowered the firm’s price recommendation on The Southern Company (NYSE:SO) to $92 from $94. It maintained an Underweight rating on the shares. He said the firm is updating price targets for Regulated & Diversified Utilities and IPPs in North America under its coverage. In March, utilities outperformed the S&P 500’s return.
On April 21, Wells Fargo raised its price objective on SO to $99 from $96. It reiterated an Equal Weight rating on the shares. Following conversations with the companies, the firm updated its Q1 2026 estimates to reflect known and measurable drivers across its regulated utility coverage. It also raised its base value multiple times to 17.5 times from 17 times.
The Southern Company (NYSE:SO) is an energy provider. It owns three traditional electric operating companies, Southern Power Company, and Southern Company Gas. The traditional electric operating companies, Alabama Power, Georgia Power, and Mississippi Power, operate as public utilities. They provide electric service to retail customers across three Southeastern states, along with wholesale customers in the Southeast.
