3 Surefire Winning Stocks to Buy If There’s a Stock Market Crash

Investors might not like what I’m about to say, but it’s an irrefutable truth: Stock market crashes are inevitable.

For many, the prospect of a double-digit percentage decline in the broad-based S&P 500 (SNPINDEX:^GSPC) is unnerving, especially given how quickly downside momentum can build in the market. But depending on your investing time frame, a crash or steep correction might represent an incredible wealth-building opportunity.

Crashes and corrections are an inevitable part of the investing cycle

For the moment, catalysts are building that suggest sizable downside may await. From a historical perspective, there have been 38 double-digit percentage declines in the S&P 500 over the past 71 years. That’s a 10% or greater drop, on average, every 1.87 years. Even though the stock market doesn’t adhere to averages, it demonstrates how common it is for equities to deflate. For context, it’s been about 1.67 years since the S&P 500 bottomed during the pandemic.

Along these same lines, bouncing back from the previous eight bear market bottoms has proven to be a process. Each of these rallies from a bear market bottom has featured one or two declines of at least 10% within 36 months. We’re now more than 20 months removed from the bottom without a single double-digit percentage decline.

Valuation stands out as a key concern as well. On Monday, Nov. 22, the S&P 500’s Shiller price-to-earnings (P/E) ratio sat at 39.5. The Shiller P/E factors in inflation-adjusted earnings over the past 10 years. Aside from this reading being more than double the 151-year average P/E of 16.89, the previous four instances where the S&P 500’s Shiller P/E topped 30 led to subsequent declines of at least 20% in the index.

We’ve also witnessed a sharp rise in margin debt over the past year. Since 1995, there have only been three instances where capital borrowing to purchase or short-sell equities has shot higher by 60% or more in a given year: Right before the dot-com bubble burst, just months before the financial crisis, and earlier this year.

Suffice it to say, there are more than enough catalysts to suggest a stock market crash or steep correction may be brewing.

Crashes are a surefire buying opportunity

But as I noted earlier, your investing style has a lot to do with how devastating these potentially sharp moves lower in the market can be. If you’re a relatively short-term trader, a crash or correction can be quite costly. But if you’re willing to see your investment thesis play out over many years, a stock market crash or steep correction has historically always been a buying opportunity.

If a stock market crash does materialize, the following three surefire winning stocks would be ripe for the picking.

Mastercard

The first winning stock long-term investors can confidently add on a significant pullback in the broader market is payment processing behemoth Mastercard (