This year has been a horrible one for investors thus far. That said, there’s now opportunity for those who may be looking for retirement stocks to buy in a bear market. Amid a gloomy September inflation report, it appears inflation data have yet to capitulate. This likely means more rate hikes from the Federal Reserve on the horizon, which could extend this bear market out.
However, it’s not all doom and gloom out there. This downturn has created many buying opportunities for contrarian investors. Sure, it is difficult to predict where the market will bottom, but historically speaking, every stock market downturn has always been the best time to buy for investors looking for higher long-term returns.
Of course, many investors still don’t have the appetite for this bear market’s risk profile. That said, for those looking to shield assets from further volatility, I believe these are among the best retirement stocks to buy during a bear market.
| BRK.B | Berkshire Hathaway | $274.97 |
| AFL | Aflac | $59.69 |
| FLO | Flowers Foods | $26.67 |
Berkshire Hathaway (BRK.B)
When it comes to finding retirement stocks to buy, watching what the Oracle of Omaha does is a great place to start. Warren Buffett’s Berkshire Hathaway (NYSE:BRK.B) is a highly-diversified conglomerate with its hands on almost every industry. The company has a massive portfolio, with significant positions in some of the biggest companies on the stock market, often hand-picked by Buffett himself. Accordingly, Berkshire Hathaway stock is undoubtedly one investors can count on during a market downturn.
Berkshire Hathaway owns a stake in many essential businesses that do well in any economic climate. Due to the company’s diversification, it has survived numerous recessions and is on a stable long-term uptrend alongside the broader economy. Thus, it is hard to see BRK stock disappointing investors in the long-term.
In Q2, the company reported a considerable $76.1 billion in revenue, which amounted to year-over-year growth of 10.2%. These results came in despite the market turmoil we’ve seen of late. And while some investors may find its quarterly loss of $43.8 billion worrying, I think it’s more tied to macro issues than company-specific problems. All in all, there is relatively little risk in holding Berkshire Hathaway over the very long-term.
Aflac (AFL)
Insurance services are vital. Whether there is a recession or hyperinflation, Americans will continue to pay for insurance, regardless. Aflac (NYSE:AFL) is the largest supplemental insurance provider in the U.S., making it among the safest retirement stocks to buy for a bear market.
AFL stock has battled other difficult economic periods and recessions in the past. That said, this company has rebounded stronger every time. Additionally, given the fact this company has outperformed the broader market during this downturn, it appears history can be investors’ guide when it comes to this stock. Even if things deteriorate, it’s hard to imagine that Aflac would have any problems continuing on its long-term uptrend when the market stabilizes.
Despite declining revenue for the past year, Aflac is a stable and profitable business that can thrive in the long term. Aflac has a low price-to-earnings ratio of 9-times, and has been hiking its dividends for 39 consecutive years. Its forward dividend yield sits at 2.7%.
In addition, with inflation heading higher, people need to pay more for out-of-pocket healthcare costs that major medical health insurance providers don’t cover. Therefore, Aflac could attract more customers as inflation heats up.
Flowers Foods (FLO)
Flowers Foods (NYSE:FLO) is a company investors can depend on in times of volatility. Compared to Berkshire Hathaway and Aflac, Flowers Foods has a small market capitalization of $5.7 billion. Despite this market cap differential, it is among the least-volatile stocks in the market.
The resilience of FLO stock is exceptional, and the same can be said for its stability. Flowers Foods is on a stable long-term uptrend and has shrugged away recessions in the past with little impact. For example, the stock shed around 30% of its value from its peak in 2008 and recovered within three years. In 2020, it declined by 17% but was back to its previous share price within a month. Even in 2022, it is only down 2.4% year-to-date, at the time of writing.
Moreover, the company’s long-term performance closely resembles the S&P500. FLO stock has gained 43.4% in the past five years, whereas the S&P500 gained 43.5%. The difference is that investors holding Flowers Foods were in much less panic during 2020 and are doing much better so far in 2022. In other words, it’s a much less-volatile stock, something which carries inherent value for certain investor types.
Additionally, Flowers Foods has generated stable revenue growing at a double-digit pace over the past two quarters. It also offers a forward dividend yield of 3.3% with 19 consecutive years of dividend increases. Thus, I believe FLO stock is one of the best retirement options to buy right now.
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.