Worried About Another Market Crash? Buy Nasdaq
The standard investor playbook says that if you think we are heading toward a recession or a crash, you should sell financials, consumer discretionary stocks, and cyclicals and buy defensive stocks. The most classic defensive plays are consumer nondiscretionary stocks. As the name implies, these are companies that make products that people will buy regardless of the economy. Good examples of consumer nondiscretionary stocks would be supermarkets or consumer products companies like Unilever or Procter & Gamble.
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Finding a financial stock that will perform well during an economic disaster like a market crash is tougher. Crashes cause the economy to slow, credit to deteriorate, and banks to call in loans. Bank stocks will generally underperform. So will real estate investment trusts (REITs) as the economy deteriorates.
Source Fool.com
