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These 3 Stocks Will Safeguard Your Retirement Plans During a Market Crash

By Rick Munarriz – Sep 19, 2020 at 7:00AM

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If you want your golden years to shine, you have to own the right stocks.

The March sell-off was a doozy, and it won't be the last time that your portfolio takes a hit. Investing for gains is all about accepting the losses, and that long-term winning approach is even more important as you consider retirement planning.

Some stocks are better suited for turbulence than others. Let's go over why I think Costco (COST -0.11%), Walt Disney (DIS 0.43%), and AT&T (T -0.93%) are three stocks that will safeguard your retirement plans during a market crash.

Five senior friends enjoying drinks at a dinner party.

Image source: Getty Images.


The warehouse-club operator checks off all of the boxes that you like to see in an all-weather investment. It's a business that thrives in good and bad times. Folks need to eat, and Costco's cost-efficient model passes on savings to its card-carrying members. It pays a dividend that it has hiked every year since initiating a payout policy 16 years ago.

We saw how well Costco held up through the pandemic. Comps did slip in April -- the one month in more than a decade in which store-level sales declined -- but that was largely due to the many centers within the store that were initially closed and the sharp drop in demand for gasoline. Comps bounced back nicely the following month.

The 790-superstore chain won't wow you with frenetic growth. This will be the seventh consecutive year of single-digit revenue growth for Costco. However, isn't that the kind of positive consistency you want in a market crash? 


It may seem awfully unfitting to talk about Disney after taking in the media giant's latest quarter. Revenue plummeted 42% with its domestic theme parks and movie theaters shuttered for the entirety of its fiscal third quarter. Even now, the original Disneyland theme park has remained closed for more than five months. 

Disney should still be a cornerstone of any long-term portfolio. It's the top dog -- top Pluto, if you will -- in media entertainment. The corner multiplex theater may not seem very inviting these days, but keep in mind that Disney had the six highest-grossing films of last year. Disney theme parks are operating on tight leashes right now, but they remain the most visited gated attractions in the world. 

The brand here is so strong that in just 10 months, Disney+ has gone from zero to more than 60 million subscribers. We'll always be hungry for entertainment, and that means that ABC, ESPN, and Disney Channel will continue to draw audiences. It's true that Disney suspended its dividend earlier this year, but it was never much of an income play anyway since its stock has historically outpaced its payouts. The next time the market crashes, there'll be a flight to quality -- and Disney is quality.


The telco giant may seem like another odd fit in a crash-proof portfolio. AT&T itself is struggling with cord-cutters at both its legacy landline business, as well as its DIRECTV cable television arm. It remains to be seen if it bit off more than it can chew with the WarnerMedia acquisition that made it a media heavyweight. AT&T's wireless business remains the bright spot here, and even that isn't a hotbed of growth right now.

You still have to put Ma Bell on the short list of names to own because even its fading businesses are still generating a ton of cash -- and AT&T does a great job of returning money to its shareholders. AT&T is a Dividend Aristocrat, having boosted its quarterly distributions annually since 1985. 

The current yield of 7.1% may seem to be too good to be true, but it is sustainable with the stock trading at a forward earnings multiple in the single digits. With conservative income-generating vehicles generating a trickle of pocket change, AT&T should stand out as a gusher with its fat yield.

Rick Munarriz owns shares of AT&T, Costco Wholesale, and Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Costco Wholesale and recommends the following options: long January 2021 $60 calls on Walt Disney and short October 2020 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.

Stocks Mentioned

AT&T Stock Quote
$19.12 (-0.93%) $0.18
Walt Disney Stock Quote
Walt Disney
$92.55 (0.43%) $0.40
Costco Wholesale Stock Quote
Costco Wholesale
$481.42 (-0.11%) $0.55

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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