Investing in a bear market can be a bit frightening. But it's also necessary to learn how to invest in different market environments -- especially when the broader economic landscape is out of your control. A bear market is a sustained period where prices in the stock market fall by 20% or more from their recent peak. Bear markets are characterized by widespread investor pessimism, market volatility, and often, a decline in economic activity.
When markets fall, many investors run to income-producing assets, stocks included. This means looking for different stocks with a stable cash flow, a history of paying consistent dividends, and participation in "staple" industries.
Investors might also consider stocks that have a competitive advantage or present a lower-cost alternative to some of the pricier service offerings in the space. Here, we'll offer some guidance about potential stocks to buy in the midst of a bear market.
Best bear market stocks to buy in 2025
1. Enterprise Products Partners
2. Mondelez International
NASDAQ: MDLZ
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3. The Coca-Cola Company
NYSE: KO
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4. CVS Health Corporation
NYSE: CVS
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5. Walmart Corporation
NYSE: WMT
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Economic stress tends to make discount and big-box stores appealing for those who previously traded up during the 2010s expansion. Walmart Corporation (WMT +1.29%) pays a modest dividend that yields a little around 1%, but the stock has delivered a total return of more than 100% in the trailing five-year period.
It's been said before that Walmart is "recession-proof" because it tends to see greater sales when people have less money overall and less money for discretionary spending. Since you can buy almost anything at Walmart, it makes for a convenient and cost-effective one-stop shop for weathering unfortunate economic times.
If you look at Walmart's revenue growth and its dividend payout taken together, there is a lot to like about the stock if you think we're heading into bear market territory.
6. AbbVie
NYSE: ABBV
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As one of the largest pharmaceutical companies in the world and a consistent dividend-payer, AbbVie (ABBV +0.02%) is more than a worthy hold during a bear market. Boasting a roughly 3% forward dividend yield, AbbVie is a compelling pick for a diversified portfolio holding during a bear market.
Despite the negative social impacts, healthcare companies have performed well as a group during prior bear markets. An aging population, combined with a steady demand for healthcare, pharmaceuticals, and related services, only points to further growth for one of the industry giants.
7. Johnson & Johnson
NYSE: JNJ
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Another Dividend King, Johnson & Johnson (JNJ -0.29%), stands as one of the most reliable income stocks you can own. The company has raised its dividend for more than 60 years and, at the same time, has shown strong revenue gains as well as profitability.
Johnson & Johnson is an established healthcare giant with blockbuster drugs spanning immunology to oncology, as well as a booming medical device segment. In 2023, it spun off its slow-growth consumer health division, known for products like Band-Aids and Tylenol, into Kenvue (KVUE +0.58%), a separate, publicly traded company.
The bottom line is that well-established, well-known healthcare companies tend to be a great spot to park money when the economy is weak. As an investor, you can expect a dividend yield in the 3% range based on current share prices. Note that while the dividend is stable and growing, the stock's price return will vary greatly from one year to the next.
8. T-Mobile US
NASDAQ: TMUS
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How to invest in bear market stocks
If you want to invest in any of the bear market stocks discussed here today, you can do so through your chosen brokerage account. Here are the key investing steps to know:
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
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The bottom line on bear market stocks
Again, investing in a bear market isn't meant to be easy. But it's also one of the best ways to invest to build long-term wealth. Staying the course with stable, income-friendly stocks is a way to achieve a seven-figure net worth -- if you do it long enough.
No matter which stocks you end up buying, be sure to maintain a diversified portfolio at all times. Don't put all your eggs in one basket. We can never really know what's coming next, so it's best to cover all your bases to the extent possible.
Take the time to properly evaluate every stock you put in your portfolio and proceed through to the next bear market with confidence.
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