Are Stocks Entering the Next Bear Market?

The Dow reached its all-time high on of 26,616.71 on Jan. 26 thanks to a nearly decade-long bull market run.

But the Dow plunged more than 1,000 points on Feb. 5. It sank another 1,000 points between March 21 and 23.

And the Dow hasn't rallied back to its previous highs after its plunges, either.

That has some investors wondering if a bear market could be on the horizon.

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You see, the Dow is more than nine years into a bull market run, which began back in March 2009. If this bull market stretches till August, it will be the longest bull market ever.

But if the Dow sinks 20% from its Jan. 26 high, we'll officially enter a bear market. A bear market could signal a prolonged downturn and pessimism about the market, and that could hurt your portfolio.

The Dow is already down 8% from its January highs.

While we aren't predicting a bear market this year, all bull markets end eventually, and it only make sense for investors to prepare for a stock market pullback.

When the market turns, smart investors will have a plan to protect their money and even profit...

Why the Next Bear Market Could Be Even Worse

While pullbacks are part of a healthy market cycle, we're seeing signs that a pullback could turn into the next bear market, or even a stock market crash.

You see, the U.S. Federal Reserve is aggressively hiking interest rates while the stock market is sitting at a record-high valuation level.

Higher interest rates are going to reduce the stock market's liquidity and could lead to further troubles on Wall Street. The Fed has hiked rates six times since December 2015, and it could raise rates two more times in 2018 alone.

You Must Act Now: America is headed for an economic disaster bigger than anything since the Great Depression. If you lost out when the markets crashed in 2008, then you are going to want to see this special presentation...

You see, the Fed responded to the 2008 financial crisis occurred by slashing interest rates to historically low levels. Cutting rates was designed to help companies borrow money cheaply and grow the economy out of recession, but public companies used the money to boost their share prices.

From 2009 to 2016, public companies bought back $2.1 billion worth of their stock shares while borrowing $1.9 trillion. Since March 2009, the Dow Jones has jumped over 260%, sending stocks to some of their highest valuations ever.

The cyclically adjusted price earnings (CAPE) ratio is one commonly used stock market valuation measure. It is currently at 30.82, which is double its historical average.

And the CAPE ratio was only higher just before the 2000 tech bubble burst. It's currently higher than in 1929, before the biggest stock market crash in history.

While we aren't predicting that the stock market will crash based on valuations, it's a reason to be vigilant and prepare your portfolio.

Fortunately, we're here to help you do just that. Here are the best stocks in bear market conditions that you can buy now...

How to Protect Your Money from Another Bear Market

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We're recommending two stocks that have a track record of performing even as the broader market declines. Both of these stocks brought positive returns during the tech crash in 2000, even as the overall markets fell more than 10%.

While there's no guarantee these stocks will be immune to the next correction or pullback, they are some of the best companies in the most in-demand industries.

Money Morning Chief Investment Strategist Keith Fitz-Gerald thinks investors should hold on to stocks in the "Unstoppable Trends." The trick to making huge profits is to find "must-have" companies that fall into these six Unstoppable Trends: medicine, technology, demographics, scarcity and allocation, energy, and war, terrorism, and ugliness (also known as "defense"). The Unstoppable Trends are backed by trillions of dollars that Washington cannot derail, the Fed cannot meddle with, and Wall Street cannot hijack.

By owning well-run companies in these Unstoppable Trends, you'll own resilient stocks that will charge out of any market downturn, leaving behind anyone who sold off stocks for other assets. And if the market doesn't correct, these stocks are still going up.

That's why we're bringing you two of our favorite stocks from the Unstoppable Trends.

Raytheon Co. (NYSE: RTN) is our play for the trend of war, terrorism, and ugliness.

Raytheon is a leader in the defense industry, with billions in contracts with the U.S. government and other countries across the world. That means if the market falls, Raytheon is going to continue to excel over the long term.

Raytheon has billion-dollar contracts with the U.S. government, but it also has a diverse customer base. International customers make up just under half of its business. That means even if a few countries cut defense spending during an economic downturn, RTN still has plenty of other customers to help it weather the storm.

But RTN's real allure as an Unstoppable Trend pick is the fact that war is a reality of the world. For instance, as tensions rise abroad, the United States is more likely to need more weapons and equipment. When the United States launched a missile strike on a Syrian airbase on April 7, Raytheon's stock jumped more than 2%, since its missiles were used.

RTN currently trades at $226.18 a share and pays a 1.53% dividend yield.

Becton, Dickinson and Co. (NYSE: BDX) is an example of a play in the Unstoppable Trend of demographics.

BDX is a healthcare company specializing in one-time-use medical products utilized in hospitals and long-term care facilities. That means as populations age, more people will need this type of medical care, and BDX will be in even higher demand. People will need healthcare whether the market falls or not.

But BDX is also an exceptionally well-managed company. It has a 10.54% profit margin and maintains a 1.58% dividend yield, even after a $12.2 billion takeover of CareFusion two years ago. That means the company's capital management is sustainable and will easily survive a market downturn. And that's good news for its shareholders during a stock market crash.

BDX trades at $232.91 and pays a 1.29% dividend yield.

While these stocks are excellent plays, we could be headed for a disaster even worse than 2008...

There Aren't Any "Safe Spaces" to Protect You from the Next Financial Disaster

America is headed for an economic disaster bigger than anything since the Great Depression.

If you lost out when the markets crashed in 2008, then you are going to want to see this special presentation.

Because if you don't act soon, the effects on your financial future could be more severe than anything you have ever experienced.

Don't wait - You can see all the details right here.

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