From Yahoo Finance: 2025-04-06 17:05:00

In a recent article on Insider Monkey, analysts highlighted the “11 Best Counter Cyclical Stocks to Buy.” These stocks are known for performing well during economic downturns, offering stability and growth potential. Companies in defensive sectors like utilities and healthcare are favored for resilience in volatile markets.

Including counter cyclical stocks in a portfolio, as per financial theory, can reduce volatility and improve risk-adjusted returns. These stocks often have low correlation with broader markets, providing stability during recessionary periods. Legendary investor Peter Lynch emphasized the strength of stable companies in downturns, stressing the importance of essential products like food and toiletries.

With potential economic uncertainty looming, experts are considering the impact on consumer confidence. Business surveys indicate a growing concern about job availability and economic slowdown, raising the possibility of a recession in 2025. Under such conditions, counter cyclical stocks could see increased business acceleration and offer better returns compared to the broader market.

Costco Wholesale Corporation (NASDAQ:COST) emerges as a top contender among the best counter cyclical stocks. Known for its competitive pricing and wide range of products, COST attracts cost-conscious consumers during economic downturns. The company reported strong second-quarter results for fiscal 2025, with net income and sales showing solid growth. Membership metrics remained robust, reflecting consumer loyalty and engagement.

Ranked 4th on the list of best counter cyclical stocks, COST has consistently outperformed the market in various economic cycles. While it presents a compelling investment opportunity, the potential for higher returns within a shorter timeframe lies with AI stocks. Investors seeking promising AI investments can explore opportunities beyond COST for potentially greater gains.

For more insights on AI stocks and billionaire-backed investments, readers can explore related articles on Insider Monkey. Disclosure: None.

Read more: Is Costco (COST) the Best Counter Cyclical Stock to Buy According to Analysts?