The stock market went careening more than 500 points lower after Federal Reserve chairman Jay Powell indicated he was willing to keep raising interest rates for as long as it took to bring inflation under control. The suggestion was a recession was better in the long run than having people endure elevated costs for an extended period.
But that doesn't mean you should pull your money out of the market. A study by JPMorgan Chase just found that over the 20-year period between January 2003 and December 2022, a $10,000 investment in the S&P 500 left untouched through the market's many gyrations (including the global financial crisis and housing market collapse in 2007 and 2008) would have grown to $64,844.
Image source: Getty Images.
Had you sold your investment at any time and missed only the 10 best days of the market, your returns would have seen over $35,000 wiped away, some 55% of its value. Partially that's because the market's best days often follow right on the heels of the worst days. Six of the seven best days occurred the very next day after the market's worst declines.
That doesn't mean you go buy just any stock, but finding quality companies that have proven themselves over the long haul -- and through all kinds of markets -- will give you the best possible chance of weathering a storm and amassing a fortune of your own. Particularly if you don't have a lot of money to invest, the following pair of time-tested stocks would be a great first place to put $500 to work today.
1. PPG Industries
Paint and coatings manufacturer PPG Industries (PPG -0.77%) has been in business for over 135 years, so it has seen a thing or two in that time. It was pinched by pandemic-related supply chain disruptions, particularly in China, and from commodity inflation, but the lockdown reopening processing and easing prices have put PPG on the path toward restoring profit margins in line with its historical rates.
PPG is the second-largest coatings manufacturer behind Sherwin-Williams and is best known for its Glidden and Pittsburgh Paints brands. Housing market softness has led to slowdowns in consumer demand for paint here and abroad, but residential housing only accounts for 10% of revenue. It continues to have a strong presence in aerospace and automotive coatings, with the latter notching near-record results last year and the former reporting robust 20% organic growth.
It shows PPG knows how to navigate through difficult times in different markets by disciplined cost controls and targeting areas to focus on. It shows the coatings company may not be recession-proof, but it is resistant to the worst gyrations of the market. PPG's superior financial position has allowed it to pay a dividend to shareholders every year since 1899, marking 498 consecutive payments while raising the payout consistently for 51 years. That makes this Dividend King a must-have for your $500 investment.
Image source: Polaris.
2. Polaris Industries
Powersports might have you thinking of a weightlifting competition, but it's really the outdoor adventure vehicles like ATVs, snowmobiles, and motorcycles such as those made by industry leader Polaris (PII -0.10%) that define the category.
While Honda all but created the all-terrain vehicle market, Polaris made the first American-made version, and it went on to define the market, especially after its trail-width compliant RZR hit the market in 2007. It would never look back -- Polaris is by far the largest manufacturer in the world and holds a dominant 23% share of the market, a nearly two-to-one lead over the runner-up.
Polaris, though, got its start in snowmobiles, where it is the second-largest manufacturer with a 33% share of the market, and it bought its way into the boat market with its purchase of Boat Holdings in 2018, giving it the strongest position in the pontoon market, one of the fastest growing segments in boat sales. Its resurrection of Indian Motorcycles from bankruptcy in 2014 has created a serious challenge to Harley-Davidson, and while it does continue to gain market share, Harley remains far and away the heavyweight motorcycle leader.
In short, Polaris holds the No. 1 or No. 2 position in all the markets it targets, and while the pandemic did hurt sales, the powersports vehicle manufacturer is once again seeing solid, stable growth while possessing a significant competitive moat.
Polaris also pays a dividend that it has increased for 27 straight years, and with its stock trading at just 11 times trailing and estimated earnings, a fraction of its sales and its expected earnings growth rate, this powersports vehicle stock is a no-brainer addition to your portfolio.
