While some investors consider short-selling the most effective hedge against potential threats, I believe the best way to guard against each of these fears is to insulate your portfolio with stocks that have the tendency to go up when that particular fear rears its ugly head.The truth is, it's very difficult to make money with short-selling, even in bear markets.As an example, during the dot-com implosion in 2001, with the Nasdaq Composite Index down 20%, the nation gripped by recession and domestic terrorism on the minds of many, the Credit Suisse/Tremont Dedicated Short Bias Index (made up of hedge funds specializing in short-selling) actually fell 3% on the year.
With that in mind, here is a closer look at several potential threats and the stocks I think could help investors ride out that particular storm: I looked at the top 10 most expensive hurricanes in U. history and determined there were three stocks that consistently moved higher after each of the storms.
They were Campbell Soup Perhaps the greatest threat to the world is the possibility of running out of clean water.
Right now, one out of every two hospital beds in the world is occupied by someone suffering from a water-borne illness.
As this becomes an increasingly serious problem—since 1950, the world population has doubled but consumption of water has tripled—two companies worth researching are Flowserve Inc., which designs water-treatment facilities.
It seems every week there is a new world-ending threat making its way through the media and investors' stock portfolios.
In February, it was the fear that every nation was going to go bankrupt, starting with Greece.Before that, it was the latest pandemic making waves at the World Health Organization.Other times it has been global warming, or terrorism, or impending hyperinflation.Sadly, the threat of terrorism may be here to stay.While markets are certain to dip after any terrorist attack, certain individual stocks may go up, much in the way bomb-detection company Invision went from in 2001 to being acquired by General Electric Co.for a few years later as a result of a new urgency after Sept. Two companies to consider: Analogic , which makes software that looks for suspicious activity on security cameras or even in cash transactions at banks.