In this article, we discuss the 11 best bear market stocks to invest in now.
As of January 2025, the prevailing sentiment among US economic experts leans towards cautious optimism regarding the stock market’s trajectory. While concerns about potential downturns exist, explicit predictions of a bear market in 2025 are not prominent. For example, economists surveyed by The Wall Street Journal have adjusted their forecasts, anticipating higher inflation and interest rates in the coming years. They note that inflation has been higher than expected, with the consumer-price index rising 2.9% in December, leading to projections of continued inflation momentum into 2025. Despite these concerns, the US economy has demonstrated resilience, driven by strong consumer spending and a declining unemployment rate, which fell to 4.1% in December. Consequently, economists estimate a 22% chance of a recession in the next 12 months, marking the lowest probability in three years.
Jeremy Siegel, a renowned economist from the Wharton School, suggests that the stock market could experience a cooling-off period in 2025, particularly within the technology sector, amid concerns over the rapid adoption of artificial intelligence. He also anticipates that interest rates might decline, which could influence market dynamics. Additionally, MarketWatch reports that foreign retail investors have been purchasing US stocks at unprecedented rates, with $76.5 billion acquired in the last three months. Historically, such surges in foreign investment have preceded market downturns, as observed before the 1987 crash, the 2000 dot-com bubble burst, and the 2008 financial crisis. This pattern suggests that increased foreign investment may serve as a contrary indicator, signaling potential market peaks.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Several economic experts also predict a bear market in 2025. For example, Cem Karsan, a volatility trader and founder of Kai Volatility, foresees a possible stock market decline of up to 40% within the next year, per a report by MarketWatch. He emphasizes that the Federal Reserve’s management of rate cuts and market expectations will be crucial. Karsan predicts that the 10-year Treasury yield could surpass 6% by the third quarter, which would exert additional pressure on stocks. He suggests that the Fed’s approach can either delay or accelerate the decline; a dovish stance might prolong the market rally but lead to a harder drop, whereas a hawkish stance could cause an earlier slide.
Similarly, Paul Krugman, a Nobel laureate and economist, has raised concerns that aggressive policy measures, such as imposing tariffs on China, could lead to inflation spikes and trade wars, potentially destabilizing the economy. He warns that such policies might exacerbate inflation and pressure the US labor market, contributing to economic instability. While these experts highlight potential risks, it’s important to note that market predictions are inherently uncertain. Other analysts maintain a more optimistic outlook for 2025. For instance, JP Morgan Research anticipates robust global economic growth, with the exception of a slowdown in China, and projects a price target of 6,500 for the S&P 500, with earnings per share of $270.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
Our list of the best bear market stocks to buy is grounded in hedge fund sentiment towards each stock. These selections are derived from sectors such as consumer staples, utilities, and healthcare, given their historical resilience and stability even during economic downturns. A considerable number of these stocks present enticing annual dividend yields and possess defensive attributes that enable them to maintain stability in a bear market. Additionally, we’ve identified promising tech stocks that currently pose as appealing entry opportunities for investors. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Best Bear Market Stocks To Invest In Now
11. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 68
AbbVie Inc. (NYSE:ABBV) is a global biopharmaceutical company focused on creating medicines and solutions that put impact first — for patients, communities, and the world. The following elements demonstrate why this company is an excellent investment choice. Firstly, the report for the third quarter of 2024 indicates the company’s strong performance driven by its core business activities. For instance, worldwide net revenues were $14.46 billion, an increase of 3.8% on a reported basis or 4.9% on an operational basis. Moreover, global net revenues from the oncology portfolio were $1.687 billion, an increase of 11.6% on a reported basis or 13% percent on an operational basis, which reflects a solid performance in the oncology business, with significant growth driven by operational factors. The report also shows an increase in the company’s quarterly cash dividend from $1.55 per share to $1.64 per share, beginning with the dividend payable on February 14, 2025, to shareholders of record. This shows an increase of approximately 5.8%, continuing AbbVie’s strong commitment to returning cash to shareholders through a growing dividend. Lastly, AbbVie and Gedeon Richter announced a new discovery, co-development and license agreement to advance novel targets for the potential treatment of neuropsychiatric conditions. This collaboration expands upon the success of nearly two decades of partnership on CNS projects.
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