how do you calculate safety stock

Article Index

Safety Stocks: Three Ways to Profit From Market Mayhem

There's never been a better time to invest in "safety stocks."

The Dow Jones Industrial Average is down 14% since July 22 and the Standard Poor's 500 Index is down 15% in that time. The U.S. economy is grinding to a halt, and a double-dip recession could be in the offing. Meanwhile, the U.S. Federal Reserve continues to undermine the dollar with expansive monetary policy.

Indeed, with so much bad news and chaos, there's never been a better time to stock up on the essentials - gold, guns, and cheap food. These are the things people turn to when the going gets tough - and the companies that provide these bare necessities shine the brightest when everything else seems to be falling apart.

That said, here are three safety stocks that are worth a look:

  • Newmont Mining Corp. (NYSE: NEM).
  • McDonald's Corp. (NYSE: MCD).
  • And Sturm, Ruger & Co. Inc. (NYSE: RGR).
Let's examine each in a little more detail.

Newmont Mining Corp.

Gold has been the can't-miss profit play of the past three years.

The yellow metal settled at yet another record high yesterday (Tuesday), surging 1.7% to $1,743.00 an ounce on the Comex division of the New York Mercantile Exchange (NYMEX). And Money Morning Contributing Editor and global resources specialist Peter Krauth says it could more than double from there.

"I expect gold to reach $5,000 before this bull market peaks," said Krauth. "I'm very open to the possibility that gold could correct from here, but I'd expect that to be nothing more than a short-term pullback."

To continue reading, please click here...