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Thursday, June 17, 2010

Look for Past Performance in Difficult Economic Times

Are there any safe stocks when the market is being battered every day by bad news?

Safety is a relative word. What one investor considers safe, another may find too risky. However, there are some stock sectors investors have looked to in troubled times as a safer haven than the general market.

No matter what the economy is doing, people still must eat and pay for utilities.

Won’t Stop Buying: You can think of other goods and services that the public isn’t going to stop buying, even in a recession - toilet paper is the classic example.

It is dangerous to assume that every company in these safe sectors is also a safe investment during tough times.

Investors should take a close look at individual companies before making decisions - not every consumer paper-goods company is a good investment.

How do you decide which companies to consider?

Look for a consistent pattern of earning across past periods of economic uncertainty.

You can do this on most financial sites.

A quick check using moneycontrol stock screener will provide various utilities with a five-year earnings growth.

This is a way to get started with finding investment candidates. The next step is a more thorough analysis, but financial websites help you narrow down the field.