Global share indices have continued to surge in early June. The FTSE 100 continues to make ground above 6,200 points and was last trading at three-month highs. Could we be on the cusp of another stock market crash though?
It could certainly be argued that recent movements on stock exchanges fail to reflect actual conditions on the ground. Nigel Green, chief executive of financial advisory firm deVere Group, recently described these stock market gains as “extraordinary”.
He commented that they’re unusual “…as tensions between the U.S. and China — the world’s two largest economies — are heightened, when the President of the US is threatening to deploy the US army onto the streets of America, and as the global economy attempts to recover due to an ongoing pandemic for which there is still no cure, to name a few of the current factors causing chaos.”
Protect yourself from a stock market crash
Investor confidence remains extremely fragile despite rising demand for so-called riskier assets, like equities. Therefore, it’s not hard to envisage another stock market crash, should any of the aforementioned issues blow up again.
It could well pay to remain well-invested in safe haven stocks then, lifeboats whose profits should remain resilient — or indeed could well advance — in the event of a macroeconomic and/or geopolitical meltdown.
Hochschild Mining is one share whose bottom line could benefit should market fears escalate again. In this scenario, investors would switch out of stocks and into classic safe havens, like precious metals, in huge numbers. The stage would then be set for silver prices to continue their recent charge.
The dual-role metal has already rocketed 15% in May and has continued to rise. It’s burst through the $18 per ounce barrier in recent hours. And there are compelling technical reasons to expect it to outperform that most famous flight-to-safety asset, gold, in the weeks and months ahead. This also makes FTSE 100 silver digger Fresnillo an attractive buy today.
More top safe havens!
I’d say Hastings Group should again outperform the broader market in the event of a fresh stock market crash. General insurance providers like this historically tend to have more resilient revenues in tough economic times. And the beauty of this particular company — a specialist in the motor insurance segment — is that citizens have a legal requirement to buy the sorts of products it offers if they still want to use a car.
Footsie share Admiral Group boasts the same advantages, as does Direct Line Insurance Group. Recent disruption to the tourism industry means these stocks are facing large travel insurance-related bills. And they could suffer more significant costs should a second wave of the pandemic hit later in 2020.
On the whole, however, these stocks are likely to remain resilient in what could prove a tough few years for the global economy.
With global markets in turmoil as the coronavirus pandemic tightens its grip, turning to shares to generate income isn’t as simple as it used to be…
As the realities of ‘life under lockdown’ begin to bite, many of the stock market’s ‘go-to’ high-yielding companies have either taken an axe to their dividend pay-outs… or worse, opted to suspended them altogether – for the near-term at least.
With so many blue-chip and mid-cap companies scrambling to hoard cash right now, where are we income investors to turn for decent yields?
Fortunately, The Motley Fool is here to help…
Our analyst has unearthed what he believes could be a very attractive option for income- seeking investors – a company that, in his view, boasts a ‘reliably defensive’ business model, combined with a current forecast dividend yield of 4.2% to boot!*
But here’s the really exciting part…
This business even has form in riding out this kind of situation, too… having previously increased sales and profits back in 2008 and 2009 when the world was gripped in the deepest economic crisis since the Great Depression.
*Please be aware that dividends are variable and not guaranteed.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Admiral Group and Fresnillo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.