Over the past year, the average 401(k) balance fell by $29,000 — but these 3 big stocks saved investors the pain (and may do so again in 2023)


Over the past year, the average 401(k) balance fell by $29,000 — but these 3 big stocks saved investors the pain (and may do so again in 2023)

2022 continues to provide stock market investors with a stark reality check.

According to financial services giant Fidelity, the average 401(k) balance fell to $97,200 in Q3 from $126,000 a year ago — a loss of about $29,000, or 23%.

It’s not exactly a surprise. The S&P 500 is down 17% year to date, while the tech-focused Nasdaq is down nearly 30% over the same period.

If you don’t want to get caught up in the wild swings of the market, you might want to look at some low beta stocks (also known as low volatility stocks).

Beta is a measure of a stock’s volatility compared to the market as a whole. If a stock has more than one beta, it is more volatile than the broader market. Stocks with a beta value of less than one are less sensitive to market movements.

Here’s a look at three low-beta stocks worth considering.

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Walmart (WMT)

At a time when many brick-and-mortar retailers are struggling, the mighty Walmart is standing out.

The company operates a massive retail business with approximately 10,500 stores under 46 banners in 24 countries. With “Everyday Low Prices,” Walmart attracts nearly 230 million customers to its stores and websites each week.

Walmart could be an opportunity for those looking for low volatility: the stock’s five-year beta is just 0.53, and it’s actually up 5.5% over the past year.

And thanks to the company’s enormous economies of scale, the business has sustained itself over several economic cycles.

Consider this: Walmart paid its first dividend in 1974. It has increased its payments every year since then.

Johnson & Johnson (JNJ)

With deep-rooted positions in the consumer healthcare, pharmaceutical and medical device markets, healthcare giant Johnson & Johnson has delivered consistent returns to investors.

Many of the company’s consumer health brands, such as Tylenol, Band-Aid and Listerine, are household names. In total, JNJ has 29 products, each capable of generating more than $1 billion in annual sales.

Over the past 20 years, Johnson & Johnson’s adjusted earnings have grown an average of 8% annually.

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JNJ announced its 60th consecutive annual dividend increase in April and now offers an annual dividend yield of 2.6%.

The stock has a five-year beta of 0.57 and is up 8% over the past year.

Coca-Cola (KO)

Coca-Cola is a classic example of a recession-proof business. Whether the economy is booming or struggling, a can of Coke is affordable for most people.

The company’s strong market position, massive scale and portfolio of popular brands including names like Sprite, Fresca, Dasani and Smartwater give it plenty of pricing power.

Add in solid geographic diversification—its products are sold in more than 200 countries and territories around the world—and it’s clear that Coca-Cola can thrive through thick and thin. After all, the company went public more than 100 years ago.

According to its latest earnings report, Coca-Cola’s net income rose 10% for the year, while adjusted earnings per share improved 7%.

The stock has a five-year beta of 0.58 and is up 11% in 2022.

Still can’t stand stocks?

Of course, you don’t have to limit yourself to stocks.

Amid hot inflation and an uncertain economy, savvy investors are diversifying their investments outside of the stock market.

For example, prime commercial real estate has outperformed the S&P 500 over a 25-year period. With the help of new platforms, such opportunities are now available to retail investors. Not just the ultra-rich.

With one investment, investors can own institutional-quality properties leased by brands such as CVS, Kroger and Walmart and receive steady income from the grocery store on a quarterly basis.

This article provides information only and should not be construed as advice. Provided without any warranty.



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