The first two months of this year illustrate how volatile the stock market can get. Below, I’ll explain how you can avoid getting whipsawed by the market. But first, let’s take a quick look at the stock market’s recent behavior.

During the first two weeks of January, the S&P 500 Index gained 2.2%. Over the next two weeks, it fell 3.1% on news of a coronavirus outbreak in China. Then, it jumped 4.8% during the first two weeks of February when it appeared the virus had been contained.

From its open on January 2 to its close on February 14, the index gained 4.2%. But along the way, a lot of money was made and lost by traders speculating on which way it might turn next. Oil prices tanked while the price of gold shot up.

Also read: Flu-Conomics: Markets Are Running a Fever

A volatile market creates short-term trading opportunities. Not only in the stock market, but in affected markets such as bonds and commodities. However, if you are not a short-term trader, a volatile market can be an unwelcome irritant.

That’s why I like to remind our readers that you don’t have to play that game. There are sectors of the economy that steadily gain ground in almost any market environment. Below are three sectors that you can rely on for high dividends and low volatility.

Utilities

It should come as no surprise that the utility sector has found renewed popularity. Over the past 12 months, the Utilities Select Sector SPDR Fund (XLU) has gained 28.7% while displaying minimal volatility. As you can see in the chart below, at no time during the past year did XLU deviate more than $5 off its trend line.

Over the past 10 years, XLU has delivered an annual average total return of 12.9%. That’s a little less than the 13.9% yearly gain from the SPDR S&P 500 ETF Trust (SPY), but at considerably less volatility, too. XLU pays an annual dividend yield of 2.8% compared to 1.7% for the SPY.

Infrastructure

There isn’t much that politicians can agree on these days, but rebuilding our nation’s crumbling infrastructure is one of them. That may be why the SPDR S&P Global Infrastructure ETF (GII) has gained 18.2% during the past year. It has also held steady in the face of the coronavirus outbreak thanks in part to its solid 3.4% dividend yield.

Over the past 10 years, infrastructure stocks have lagged the market. That’s because government spending was mostly focused on reviving the financial sector in the aftermath of the Great Recession. But with a presidential election looming later this year, politicians will be looking to appease voters by directing more money towards construction-related equities.

Real Estate

It was only four years ago that Standard & Poors added Real Estate to the list of sectors comprising the S&P 500 Index. Previously, these real estate investment trusts (REITs) were lumped in with financial companies such as banks and credit card issuers. So, there isn’t as much history to go by.

However, the 23.4% return of the Real Estate Select Sector SPDR Fund (XLRE) over the past 12 months suggests real estate is getting plenty of attention from Wall Street these days.

GII pays a dividend yield of 3% which is double the 1.5% yield on the 10-year Treasury note. In addition to being a solid source of income, equity REITs are one of the few asset classes that benefit from rising inflation.

Rents on the properties REITs own increase at a faster rate, meaning there is more money to pay to out to their shareholders. That may not matter much now, but it could make a big difference in a few years as the rapidly rising federal deficit forces the U.S. Treasury to pay higher interest rates on the money it borrows to finance its debt.

What Lies Ahead

Utilities, infrastructure, and real estate are three sectors that tend to get ignored while the stock market is booming. Instead, high-growth momentum stocks get all the attention. But when the stock market hits the skids, those overvalued companies suffer the most as money moves into dividend-paying stocks.

Nobody knows what the future holds for the stock market. What we do know is that stock market valuations are at all-time highs while economic growth is slowing down. If the coronavirus outbreak morphs into a global pandemic, momentum stocks will get crushed.

Editor’s Note: Jim Pearce just provided investing insights that are invaluable for investors trying to cope with coronavirus-induced market drops. There’s another expert on our team who can help guide you through these tumultuous times: Jimmy Butts.

Jimmy Butts is chief investment strategist of the premium trading service Top Stock Advisor. He’s skilled at pinpointing hidden gems that possess intrinsic merits. Jimmy knows how to find money-making opportunities, even during periods of extreme uncertainty as we’re experiencing now.

The stocks Jimmy finds are usually ignored by the investment herd but they eventually go on to beat the market, regardless of the crisis du jour. For his latest under-the-radar plays, click here now.