Forget Goldman Sachs, SVB Financial Is a Better Bank Stock
Heading into a recession, bank stocks aren't the place to be invested. Highly sensitive to changes in economic activity, they're especially vulnerable to the market's panic. As of this writing, the Dow Jones U.S. Banks and Financial Services Indices are down 36% and 25%, respectively, in 2020, compared with an 11% decline for the S&P 500.
But once a recession has started -- and more importantly, once some visibility on a recovery begins to come into focus -- banking and financial services can be some of the best stocks to capitalize on a rally. For example, investment banking giant Goldman Sachs (NYSE: GS) more than doubled in value from March 2009 (the stock market bottom during the Great Recession) to the end of the year. Since then, the banking giant's stock has done very little, but the initial surge once the economic recovery was in sight was worth taking advantage of.
Even better than Goldman Sachs, though, was investment bank SVB Financial Group (NASDAQ: SIVB), better known as the parent of Silicon Valley Bank. Over the past decade, SVB's stock has roughly tripled, which includes a nearly 30% fall from recent highs this year. The regional institution is a top way to play investment banking in the tech- and start-up-rich San Francisco Bay Area, and a better bank stock in general than most of its larger peers.
Source Fool.com
