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, while emphasizing that its timing is unknowable. Berkshire ended Q2 with more than $350 billion in cash; Realty Income yields 6% and has raised its dividend annually for over 30 years; Progressive has a $92 billion investment portfolio, with equities at 5%. Rising rates pressure Realty Income shares and Progressive’s bond values, but the article argues their income and balance-sheet characteristics could offer resilience.

Analysis

The key distinction is between balance-sheet optionality and true downside protection. Berkshire Hathaway’s cash can support opportunistic buying, but it is not a put: operating businesses and public-equity holdings can still weaken, while sitting on cash can lag if markets rise and attractive deployment opportunities do not appear. Greg Abel’s capital-allocation record is a multi-quarter catalyst to monitor, not an assumed continuation of Buffett-era returns.

Realty Income is the least convincing crash hedge. Its long-duration property cash flows can benefit if government yields fall, but recession-driven tenant stress, wider credit spreads, and higher refinancing or equity costs can overwhelm that duration tailwind. The quoted dividend yield alone does not establish safety; payout coverage, debt maturities, and funding access matter.

Progressive has less direct equity-market exposure in its investment portfolio, but its economics remain exposed to bond duration and, more importantly, underwriting. Auto repair and replacement-cost inflation, claims frequency, and state-level pricing approval can pressure margins even when premium demand is resilient. The required-insurance argument does not guarantee affordability or profitable pricing.

Contrarian view: these are not interchangeable defensive assets, and a broad selloff could initially pressure all three. Over 1–3 months, rate moves and earnings/underwriting updates matter more than crash-protection narratives; over 6–18 months, Berkshire’s deployment decisions and insurers’ ability to reprice claims are the structural tests. No valuation or current price data are supplied, so avoid asserting any is cheap.

Key Decisions for Investors

• If seeking equity downside resilience, consider a modest relative long in BRK.A against a broad-market index exposure, sized for Berkshire’s remaining equity and operating-business risk. Enter on relative weakness rather than chasing a defensive-news premium; reassess if cash is deployed into poorly timed acquisitions or the operating results deteriorate.
• Treat PGR as a conditional quality/underwriting position, not a bond proxy. Before adding, verify recent combined-ratio trends, rate adequacy versus claims-cost inflation, and state approval/pricing constraints. A sustained deterioration in underwriting metrics falsifies the defensive thesis.
• Do not buy O solely for its yield as a crash hedge. Monitor debt maturities, interest coverage, tenant concentration/credit, and share issuance; consider it only if the income thesis survives funding stress and the investor accepts rate sensitivity.
• Near-term catalyst watch: changes in Treasury yields and credit spreads, Berkshire capital-allocation disclosures, Realty Income funding terms, and Progressive underwriting results. If recession fears ease and yields rise, the relative appeal of O may weaken even as broader equities recover.