Buying These 2 Stocks Is a Good Way to Hedge Against a Market Crash

If you're worried about the stock market crashing, then now is a good time to review your portfolio allocation. It's never a good idea to panic and sell all of your stocks, but it's important to make sure that your investment allocation is aligned with your risk tolerance and time horizon. We could see a market downturn if high interest rates trigger a recession. These two stocks could provide a nice hedge for your portfolio in a bear market.

Gilead (NASDAQ: GILD) is a biotechnology company with a broad portfolio of drugs focused on the treatment of HIV, viral hepatitis, and several cancers. That portfolio includes blockbusters Biktarvy, Descovy, Genvoya, Odefsey, Yescarta, Vekrlury, and Sofosbuvir. Gilead's pipeline also has dozens of candidates at various stages of development and clinical trials.

If a market crash is coming, it will likely be the result of a recession. The Fed has been hiking interest rates to combat inflation since last year. High rates tend to slow economic activity, and this can trigger a recession as businesses lay off employees and abandon expansion plans. That's been a fear shared by many investors for a while now, but recent economic data points have created optimism. The S&P 500 is up more than 16% year to date thanks to that optimism, so the market is likely to tumble if a recession comes to fruition.

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Source Fool.com