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What the smart money is buying as the market tanks

The Dow and S&P 500 are now both in the red for 2018, and investors have few places to hide as the stock mar...

Posted: Dec 6, 2018 5:40 PM
Updated: Dec 6, 2018 5:40 PM

The Dow and S&P 500 are now both in the red for 2018, and investors have few places to hide as the stock market tanks. But savvy people are finding some pockets of safety.

Gold, an investment that often shines during times of financial stress, is up nearly 4% so far in the fourth quarter while the S&P 500 and Dow have both plunged nearly 10% and the Nasdaq has plummeted almost 13%.

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The rise in gold prices has been good news for miners too. Newmont (NEM), which is in the S&P 500, is up nearly 10% since the end of September. The VanEck Vectors Gold Miners ETF (GDX) has gained about 7%.

Utility stocks and real estate investment trusts, which both pay hefty dividends, have held up well too. The Dow Jones Utilities Average has gained more than 3.5%. The SPDR Dow Jones REIT ETF is up more than 1%.

Yield plays in focus

Another clear sign investors are craving anything that can guarantee them a bit of a return: Investors keep rushing into bonds, despite the yield on the 10-Year Treasury falling to just 2.85%. The iShares 20+ Year Treasury Bond ETF (TLT) has gained nearly 2.5% this year.

Neil Dwane, managing director of Allianz Global Investors, said these more conservative investments might be coming into favor now because investors are realizing that growth in the US this year might be as good as it gets for awhile.

That's because the Federal Reserve has been raising interest rates, the global economy is slowing and the sugar rush from lower taxes and other federal government stimulus should begin to fade.

"People have started to think, 'How much better can the news really get?' The reasons to be as bullish are becoming less evident." Dwane said.

Investors chowing down on food stocks

Another area of the market has held up noticeably better as of late too: food and beverage stocks.

Many of them, like the utilities, tend to pay attractive dividends. But a lot of food and drink companies are staples or affordable luxuries -- the types of things people will continue to buy even if the economy heads south. People may even still pay up for a $5 latte but they aren't going to buy a new $50,000 car.

Starbucks (SBUX) has been one of the better performers in the S&P 500 for the past two months. Shares are up nearly 20%.

SPAM producer Hormel (HRL), frozen french fry company Lamb Weston (LW) and spice maker McCormick (MCK) have also been top gainers in the S&P 500 during the fourth quarter. So have McDonald's (MCD) and Coca-Cola (KO).

So it looks like in these uncertain times for the markets and economy, eat, drink and be merry is one way for investors to profit.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 58640

Reported Deaths: 1677
CountyConfirmedDeaths
Hennepin18641828
Ramsey7233261
Dakota4188104
Anoka3515114
Stearns286420
Washington200944
Nobles17536
Olmsted168823
Scott147918
Mower10942
Rice10138
Blue Earth8745
Wright8475
Carver8162
Clay76840
Sherburne7037
Kandiyohi6871
St. Louis48619
Todd4222
Lyon4213
Freeborn3581
Steele3381
Nicollet32913
Benton3153
Watonwan3010
Winona25416
Crow Wing22514
Beltrami2150
Le Sueur2101
Martin2045
Chisago1891
Goodhue1878
Otter Tail1853
Cottonwood1750
Becker1501
McLeod1480
Pipestone1479
Polk1453
Waseca1380
Douglas1360
Itasca13512
Carlton1320
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Pine1280
Dodge1250
Murray1221
Isanti1160
Chippewa1011
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Rock770
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Cass712
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Renville625
Fillmore610
Lincoln540
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Swift521
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Pope460
Roseau460
Houston410
Norman370
Kanabec321
Redwood320
Wilkin323
Hubbard300
Aitkin291
Marshall290
Mahnomen261
Wadena240
Red Lake230
Big Stone220
Lake200
Stevens170
Clearwater150
Traverse100
Lac qui Parle60
Kittson30
Cook20
Lake of the Woods10

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 47424

Reported Deaths: 910
CountyConfirmedDeaths
Polk10032206
Woodbury369151
Black Hawk308463
Linn227987
Johnson202116
Dallas184635
Buena Vista179112
Scott165514
Dubuque162331
Marshall142525
Pottawattamie128426
Story114114
Wapello87233
Muscatine84048
Webster7727
Crawford7263
Sioux6143
Cerro Gordo59617
Warren5471
Tama54529
Jasper46626
Wright4551
Plymouth4528
Louisa38014
Dickinson3774
Clinton3623
Washington29310
Boone2442
Hamilton2441
Franklin2339
Bremer2037
Clarke1953
Emmet1882
Carroll1851
Shelby1771
Clay1761
Hardin1730
Marion1620
Allamakee1544
Poweshiek1538
Des Moines1522
Jackson1481
Benton1461
Floyd1432
Mahaska13917
Guthrie1315
Cedar1281
Jones1272
Buchanan1231
Hancock1212
Butler1192
Henry1193
Pocahontas1151
Madison1142
Lyon1092
Lee1073
Cherokee1031
Clayton1023
Harrison1020
Humboldt1001
Delaware991
Taylor960
Iowa941
Monona910
Winneshiek911
Mills850
Page850
Calhoun832
Kossuth830
Sac820
Fayette810
Jefferson800
Palo Alto800
Osceola790
Mitchell780
Winnebago770
Grundy761
Union751
Monroe697
Worth650
Lucas574
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Davis521
Cass501
Howard490
Appanoose473
Greene390
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Van Buren341
Keokuk331
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Adair270
Decatur230
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