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Despite many well-known stocks losing value, Walmart and Costco stocks stayed steady.
Experts explained why that is, and what to look forif youre invested in these companies.
Thats why Walmart and Costco are stable when other firms are struggling, she said.
Theyre not enjoying their lives like they do when things are going up, he pointed out.
He said thats where Walmart and Costco come in, because they sell cheap, cost-effective products.
People just want to save money, and these are the go-to places when that mindset takes over.
They opt for cheaper brands and shop where things cost less.
Costco and Walmart both excel at providing more products for a lower price, she explained.
For example, Costco operates on a membership model, generating stable revenue even before customers spend a penny.
Walmart leverages its enormous size and purchasing power to enable low costs.
Will They Stay Strong If the Economy Gets Worse?
Will these companies stocks hold their value even if the economy gets worse?
Wright suggested they probably will, but acknowledged there are risks, too.
Such things as high personnel expenses, supply issues or individuals reducing costs even further can derail their sales.
Despite holding steady, Capablanca said that theyre not totally unique.
Fast-food companies show similar behavior patterns, he said.
When people stop going to fancy restaurants, they start going to fast food, like Chipotle or McDonalds.
The general idea is that businesses that offer decent quality at a cheap price tend to hold up better.
Its a good defensive play in a tough market, he said.
That means they can help insulate your money when other shares rise and fall.
Of course, its also smart to have a diversified portfolio.
You dont have to do it all at once.
That switch adds volume.
People are still spending, just more strategically, and that plays right into Walmart and Costcos model.
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