Just because we’re in a nearly nine-year-old bull market doesn’t mean that all stocks are good bets.
Even though the Standard & Poor’s 500 stock index soared by 22% in 2017, 23% of the stocks in the index had negative returns for that period.
But for stock investors, even losers can pay off. You can take a position in any given stock that will make you a profit if that stock declines in value. You may know that this strategy is called short selling, and if you think it’s a risky strategy, you’re right, because short sellers can lose a lot of money when stocks they bet against rise in value.
But there are ways that short sellers can mitigate that risk—talk to your broker or financial adviser about what type of short selling might fit your risk tolerance.
If short selling interests you, consider the following six S&P 500 stocks as candidates—they are among the stocks I think most likely to decline in value…
Harley-Davidson (HOG) and Signet Jewelers (SIG) both rely heavily on sales financed by credit. But many of their customers are failing to keep up with payments, which is dragging down the companies’ profits.
Hanesbrands (HBI) and Nike (NKE) are experiencing slowing demand for their activewear apparel. As unsold inventory piles up in warehouses, the companies are forced to cut prices to move merchandise.
Macerich (MAC) and Simon Property Group (SPG) are real estate investment trusts (REITs) that own high-end shopping malls. E-commerce is now softening demand for physical space in malls even among luxury tenants.
