Stocks That Rose During the Great Recession: Analysis of Recession-Resistant Investments

This analysis examines which stocks performed positively during the Great Recession (December 2007 - June 2009), addressing the Reddit user’s inquiry about recession-resistant investments. The user noted that most familiar stocks dropped approximately 40% during this period, seeking alternatives that actually gained value [0].

The Great Recession was devastating for most equities. The S&P 500 fell 37.87% from December 2007 to June 2009, dropping from $1,479.63 to $919.32, with the index reaching a low of $666.79 in March 2009 [0]. This represented a 57% decline from its October 2007 peak, making it one of the worst bear markets since the Great Depression [1].

was the standout performer, gaining in 2008 [0]. The stock rose from $8.64 to $13.90, making it the best-performing S&P 500 stock that year [2]. Dollar Tree benefited from consumers seeking extreme value during economic hardship.

delivered a gain in 2008 [0], significantly outperforming the market by over 58 percentage points [2]. As the nation’s largest low-price retailer, Walmart’s “everyday low prices” strategy proved recession-proof.

gained in 2008 [0]. The discount apparel chain’s “Dress for Less” value proposition resonated with consumers cutting back on clothing expenses [2].

rose in 2008 [0]. During economic downturns, consumers tend to repair existing vehicles rather than purchase new ones, benefiting auto parts retailers [2].

managed a modest gain in 2008 [0]. While not spectacular, this performance was remarkable given the market conditions. McDonald’s benefited from consumers trading down from casual dining to fast food [2].

Additional stocks that performed well included:

• Vertex Pharmaceuticals (VRTX)
  : +30.67% [2]
• Amgen (AMGN)
  : +23.93% [2]
• Edwards Lifesciences (EW)
  : +20.19% [2]
• Hasbro (HAS)
  : +17.11% [2]
• General Mills (GIS)
  : +9.76% [2]
• Netflix (NFLX)
  : +12.54% [2]

The data validates the Reddit discussion’s premise - very few stocks rose during this period. Analysis shows that only about

posted positive returns during the Great Recession [2]. This confirms the observation that cash, short positions, and ultra-defensive stocks were the primary ways to avoid losses.

All top performers shared common characteristics:

1. Value Proposition
   : Companies offered essential goods or services at competitive prices. Discount retailers thrived as consumers sought to stretch limited budgets [2].

2. Business Model Resilience
   : Companies with non-discretionary products or services proved most resilient. Automotive parts, healthcare, and consumer staples maintained demand regardless of economic conditions [2].

3. Sector Diversification
   : The best performers came from defensive sectors: Consumer Staples, Healthcare, and discount-oriented Consumer Discretionary companies [2].

: While 2008 provides valuable insights, the next recession may have different characteristics. The 2008 crisis was primarily a financial and housing crisis, whereas future downturns could stem from different factors.

: Many of these “recession-proof” stocks now trade at premium valuations due to their perceived safety, potentially limiting upside during future downturns.

: The companies that survived and thrived in 2008 may not be the same ones that will perform well in future recessions. Business models and competitive landscapes evolve.

: The Federal Reserve’s response mechanisms, interest rate environments, and fiscal policy tools differ significantly from 2008, which could affect investment outcomes.

For investors concerned about potential recessions, consider monitoring:

• Consumer spending patterns
  on discretionary vs. non-discretionary items
• Unemployment trends
  and their impact on different retail segments
• Interest rate environments
  and their effect on business models
• Sector rotation patterns
  leading into economic downturns
• Valuation metrics
  for traditionally defensive stocks

The Great Recession analysis reveals that successful recession-resistant investments typically featured:

• Strong value propositions for budget-conscious consumers
• Non-discretionary products or services
• Defensive sector positioning (Consumer Staples, Healthcare, discount retail)
• Business models that actually benefit from economic stress

However, investors should be aware that past performance during recessions does not guarantee future results. Several critical factors warrant consideration including valuation risk, sector concentration risk, changing consumer behavior, and different regulatory environments compared to 2008.