When Belts Tighten, Focus on Food ETF

Gas prices are up, the economy may or may not be on the verge of a slowdown, and interest rates are going higher. All of these things might leave many investors worried about the stock market for the rest of the year.

But no matter what happens with the stock market, you will still need your Cheerios, Doritos and half-caf, no-foam skinny latte. These inelastic needs are behind the composition of the PowerShares Food & Beverage Portfolio(PBJ Quote). (Get it? PBJ, like the sandwich?)

Whether a bear market might be starting now is certainly subject to debate. Once a bear market does start, however, consumer staples stocks often hold up better than the rest of the market. The idea is that consumers will not forgo the most basic food needs. Realistically, would your soda consumption change in the face of a recession?

While it is too soon to know how significant the S&P 500's action was in May, clearly there was fear in the market last month, with the S&P falling 3%. But in the same month, the PBJ fell only 0.6%. This could be a microcosm of what may happen in a bear market, regardless of whether or when you think that may come. ...