3 Sectors That Could Survive A Correction

After markets posted record highs in 2014, many began to worry about a market correction in the coming year as rates rise and the tech sector cools off. This first week of 2015, oil prices brought U.S. markets sharply lower, reminding traders that the good times may not last forever. While some analysts believe that 2015 will be another prosperous year for markets, others are looking into sectors that will withstand a correction.

Healthcare

Although the healthcare sector has seen some major reforms over the past few months, it remains an industry that sees constant demand. Pharmaceuticals such as Johnson & Johnson JNJ and Celgene Corp CELG are stable companies with strong product portfolios.

Low-Cost Retailers

Retailers whose income depends on low- and middle-income families could deserve a look when markets are unstable. Wal-Mart Stores, Inc. WMT is a great example of a business that thrives when consumers tighten their spending habits. In fact, Wal-Mart weathered the 2008 recession with shares rising 7.7 percent from 2007 to 2009.

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Consumer Goods

Stable, quality consumer goods companies can provide some stability during a market correction as the need for staple household items, coupled with a solid balance sheet, typically keeps companies like Colgate-Palmolive Company CL and Procter & Gamble Co PG afloat.

However, individual stocks that have the potential to weather a correction can be found across a wide variety of sectors. Companies that boast steady earnings growth, low debt and stability within their industry are likely to be those that can weather a financial storm.