The Stock Market Takes a Roller Coaster Ride

The Stock Market Takes a Roller Coaster Ride

While Black Monday may seem to have been all doom and gloom, the truth is that there is a silver lining in that cloud. Investors everywhere are worried about the hits that their portfolios will take due to the current corrections in the stock market. However, not all stocks are buckling under the pressure. In fact, there are some stocks that are actually thriving during this time and these are the stocks that you should keep watching. According to USA Today, the 3 stocks to watch that are currently a part of the S&P 500 include Stericycle (SRCL), Public Service Enterprise (PEG), and Dominion Resources (D). The Stock Market Takes a Roller Coaster Ride

What is worthy of note is that utility stocks have traditionally fared well during past corrections and some have actually posted gains. This clearly signifies that investors ought to consider including at least some utility stocks as a part of their investment portfolios. Some of the top electric utility stocks include Nextera Energy Inc (NEE), Idacorp Inc (IDA), NV Energy Inc. (NVE), UNS Energy Corp (UNS), Eversource Energy (ES), Unitil Corp (UTL), Pinnacle West Capital Corp (PNW), and Westar Energy Inc (WR). These stocks are rated among the best utility stocks based on their credit ratings and on company fundamentals.

Near the end of trading today investors breathed a sigh of relief with the news that American stocks had recovered somewhat from yesterday’s nosedive as China cut interest rates in a bid to boost the economy. This is the 5th time that China has cut interest rates in the last 9 months. All stock indices had taken a move in the right direction with the Dow Jones up by over 1.9%, the S&P 500 up 1.8% and the Nasdaq gaining 2.6% since yesterday. The stock with the highest gain was Best Buy which recorded a 16% gain. On the losing end was Pepco Holdings which declined by 15.1% following a failed proposal for merger with Exelon. However, the joy was short lived as news broke towards the end of trading that the Dow has since slid by 200 points and the S&P 500 is also down by 1.4%.

Investors can expect continued volatility in the markets as corrections continue to happen. It shouldn’t be a surprise that the market is up and down and all over the place since this is typical of what happens in an adjustment period. Once again, long term investors are the ones who are expected to fare best at the end of the day once the corrections iron themselves out. Investors should use this time to take a careful look at their portfolios and decide whether any adjustments are necessary. However, investors should avoid making rash decisions based on the last few days trading.

At the end of the day, the words “Black Swan” keep coming up. Could this be an indication of a Black Swan event in the making? While only time will tell, investors need to prepare themselves for the worst while hoping for the best.