Skip to Content
Stock Strategist

Five Stocks to Buy When Cash Is King

Strong balance sheets will anchor these companies in times of turmoil.

Mentioned: , , , ,

The headlines are everywhere: banks are dead; consumers are dead; Congress is useless; houses are less than useless; even the redoubtable growth engines of Asia are wheezing to a halt. In this dark and uncertain environment, it's tempting to sell all your stocks and wait for better days.

While we are sympathetic to such views and think it's wise to exercise caution, it's probably not smart to exit the market in a panic. Very few people can time markets consistently, and there is an ample body of research showing the folly of attempting to do so. Fortunately, there are ways of protecting yourself without going to cash, such as investing in companies with solid balance sheets and little liquidity risk--companies that can take advantage of this recession by buying distressed rivals or expanding their businesses and taking market share. These businesses should exit the recession bruised, but leaner and tougher than ever before.

Michael Tian does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.