My ISA is ready for an S&P 500 bear market

As the S&P 500 index flirts with bear market territory, this investor is keeping his eye on one holding in his Stocks and Shares ISA portfolio.

| More on:
Tabletop model of a bear sat on desk in front of monitors showing stock charts

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

While UK investors were enjoying Easter Monday yesterday (21 April), the S&P 500 closed down 2.36%. The market was rattled when President Trump sent some less-than-festive words to Federal Reserve Chair Jerome Powell, calling him a “major loser” for not cutting interest rates.

Reports say that the administration is looking into ways to remove Powell. As no president has removed a Fed Chair before, more uncertainty is being stirred up for stock investors.

Choppy waters

The S&P 500 has now fallen 16% since mid-February. The way things are going, 20% now looks like a distinct possibility. This would put the index into bear market territory — the first time since 2022.

Should you invest £1,000 in Robert Walters Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Robert Walters Plc made the list?

See the 6 stocks

Nearly half of my Stocks and Shares ISA portfolio in terms of value is made up of S&P 500 stocks. These include Visa, Nvidia, Intuitive Surgical (NASDAQ: ISRG), Uber Technologies, Axon Enterprise, and CrowdStrike.

I’m happy with the quality and resilience of these companies. They all have very strong competitive positions, ranging from digital payments (Visa) and AI chips (Nvidia) to cybersecurity (CrowdStrike) and taxis (Uber).

While a potential recession would knock consumer and business confidence alike, people will still be paying for things via their credit and debit cards and taking taxis. Meanwhile, businesses cannot afford to scrap cybersecurity, especially when hacking incidents are on the rise.

This is important because when a bear market strikes and stocks are falling, I want to have confidence that those in my ISA will likely bounce back when things start improving. And improve they will, as history shows that the S&P 500 has eventually recovered from every previous bear market.

In contrast, if my ISA was stacked with speculative stocks and firms with dubious business models, I would worry about permanent losses. That would make things much more stressful.

Investing during the storm

Recently, I have been buying a small handful of stocks that suddenly fell 25%+. My ISA still has a bit of cash left in it to carry on doing so over the next few weeks.

One stock from the list above that I’ve been waiting to add to for ages is Intuitive Surgical. Through its Da Vinci surgical systems, the company is a global leader in robotic-assisted surgery.

There are around 10,000 Da Vinci machines in hospitals worldwide, and last year surgeons carried out nearly 2.7m procedures with them. Once they are installed and professionals are trained, there are very high switching costs, giving Intuitive a wide moat.

However, there are a couple of specific threats hanging over the firm right now. One is rising competition from medical device giants Medtronic and Johnson & Johnson. Both are hoping to muscle their way into the lucrative robotic surgery space.

Another uncertainty is tariffs, with much of the firm’s manufacturing done in Mexico.

Created with Highcharts 11.4.3Intuitive Surgical PriceZoom1M3M6MYTD1Y5Y10YALL22 Apr 202022 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025www.fool.co.uk

Intuitive’s share price has dipped 23% in three months. However, the forward price-to-earnings ratio here is around 58. That’s about in line with its five-year average but a big premium to the S&P 500 (20). This tells me the stock is not yet on sale.

As it happens, the robotics pioneer reports its Q1 2025 results today. I’ll see what management says and how the stock responds in the next few days before taking another look.

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ben McPoland has positions in Axon Enterprise, CrowdStrike, Intuitive Surgical, Nvidia, Uber Technologies, and Visa. The Motley Fool UK has recommended Axon Enterprise, CrowdStrike, Intuitive Surgical, Nvidia, Uber Technologies, and Visa. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Don’t panic as Warren Buffett retires! Just stick to the Oracle of Omaha’s method

The world's greatest investor Warren Buffett is finally retiring, but this isn't the end of his influence. It’s only the…

Read more »

US Tariffs street sign
Investing Articles

Up 10% in a month! Are the Scottish Mortgage shares the best way to play the tech stock recovery?

Harvey Jones is impressed by the resilience shown by Scottish Mortgage shares during recent turmoil. Should tech-focused investors consider buying…

Read more »

Mature black woman at home texting on her cell phone while sitting on the couch
Investing Articles

Is the HSBC share price an absolute steal at today’s levels?

The HSBC share price has had a terrific run despite the recent sell-off. Now Harvey Jones wonders if the FTSE…

Read more »

Close-up image depicting a woman in her 70s taking British bank notes from her colourful leather wallet.
Investing Articles

Start investing in the stock market this May with under £1,000? Here’s how!

Christopher Ruane explains some basics of how a stock market newcomer could start investing with under £1,000 and no prior…

Read more »

Fans of Warren Buffett taking his photo
Investing Articles

Is this a ‘Warren Buffett moment’ in the markets?

Warren Buffett has been doling out wisdom to shareholders this weekend. Our writer puts one well-known Buffett adage into current…

Read more »

Young woman holding up three fingers
Investing Articles

3 stocks Fools bought over 10 years ago and still hold

The Motley Fool’s approach to investing prioritises buying and holding quality stocks for long periods of time.

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

8.1% yield! Here’s the dividend forecast for British American Tobacco shares through to 2027

British American Tobacco shares have been a prized commodity for investors seeking a large passive income. Are they a potential…

Read more »

House models and one with REIT - standing for real estate investment trust - written on it.
Investing Articles

1 FTSE 250 stock trading well below book value

Stephen Wright thinks investors have a number of attractive possibilities with a FTSE 250 REIT trading at a discount to…

Read more »