If a Stock Market Crash Is Coming, History Says These Are the 3 Financial Stocks to Buy

The article recommends Berkshire Hathaway, Realty Income, and Progressive as potential defensive holdings ahead of a possible bear market. Berkshire ended Q2 with more than $350 billion in cash; Realty Income offers a 6% dividend yield and has raised its dividend annually for over 30 years; Progressive has a $92 billion investment portfolio, with equities accounting for 5%. The piece flags elevated valuations, geopolitical conflicts, leverage, inflation, and rising yields as risks, but does not report new company results or market reactions.

Analysis

This is a relative-resilience case, not a reliable crash hedge: all three remain equities, and their key downside channels differ. Berkshire Hathaway’s liquidity creates option value only if Greg Abel deploys it at attractive prices; otherwise, cash drag and the operating businesses’ exposure to a broad downturn can offset that optionality. Realty Income is the clearest duration trade: lower yields could support its valuation and financing capacity, while persistently high rates or weaker tenant coverage could overwhelm the appeal of the dividend. Progressive’s limited equity allocation reduces direct market sensitivity, but does not make its bond book immune to rate-driven mark-to-market losses; falling rates also eventually reduce reinvestment income. Mandatory auto coverage supports demand, not unlimited pricing power—premium affordability, claim severity, and regulatory constraints matter. The article’s historical resilience examples should not be treated as guarantees for the next cycle. Over the next 1–3 months, rates, credit conditions, and underwriting updates matter more than an imprecise call on when a bear market arrives. Over 6–18 months, Berkshire’s capital allocation and Realty Income’s tenant/financing metrics are the more consequential differentiators.

Key Decisions for Investors

• Treat BRK.A as a potential defensive core holding, not a cash-equivalent hedge. Add in stages rather than buying solely on a crash thesis; monitor cash deployment, capital allocation, and operating results. The thesis weakens if cash remains idle while operating performance deteriorates or the shares fall alongside the broader market.
• Keep O on a rates-and-credit watchlist; avoid chasing yield without checking the Treasury spread, debt/refinancing costs, tenant coverage, and occupancy trends. A more constructive entry setup would require stabilizing or falling yields without deterioration in tenant health; persistent high yields plus worsening credit metrics would falsify the defensive-income case.
• For PGR, focus on underwriting rather than the headline equity share of its portfolio: track claims severity, pricing adequacy, combined ratio, and investment income. Reassess if claims costs outpace premium increases or regulation limits repricing; do not assume a bond-heavy portfolio guarantees gains in a downturn.
• No broad three-stock basket trade is compelling from this article alone. If adding defensiveness, size the positions against existing equity and rate exposure, and compare O’s yield spread and PGR’s underwriting metrics with current data before entry; the article supplies neither valuation nor current operating metrics needed to justify a price target.