MORGAN STANLEY: Buy these 11 stocks, which have been dominant throughout history following recession-driven bear markets

Xinhua/Wang Ying/ Getty Images

• Mike Wilson, chief US equity strategist for Morgan Stanley, says it's a good time for investors to take a look at strong companies that will benefit from an economic recovery.
• That's because recessions historically come at the end of bear markets, not their beginning. That means the official onset of a recession, which is expected soon, could be good for stocks.
• Wilson and his team reviewed stocks with high ratings that outperformed after recent recessions, and they think they'll likely do the same as investors turn their attention to the recovery.
• Visit Business Insider's homepage for more stories.

The world and the stock market have moved at light speed over the last few months, and it's safe to say that's going to continue.

After a record-fast drop into a bear market, signs of an almost instantaneous recession, and a new bull market for the Dow Jones Industrial Average, Morgan Stanley Chief US Equity Strategist Michael Wilson says it's a good idea for investors to start getting their portfolios in shape for the eventual recovery.

A key point is that the stock market will usually price in a recession before it actually begins. That's usually a slow process, but it happened with dizzying speed in February and March. That means the recession itself is a new and less bearish period for stocks.

"A recession typically signals the end, not the beginning, of a bear market," Wilson wrote in a note to clients. "While it's not possible to call an absolute bottom with precision, we think it's close on many metrics. ... on a 6- to 12-month horizon, this will prove to be a buying opportunity."

Based on analysis of past recessions and bear markets, Wilson says, the recent sell-off has followed normal patterns, just at an accelerated pace.

"From the market peak, defensives (Utilities/Staples) tend to lead; after sell-offs of 25%, leadership remains defensive but it shifts slightly more cyclical (Banks, Semis, Consumer Durables/Apparel)," he wrote. "Once the market troughs, Tech, Consumer Cyclicals & Industrials take the leadership roles."

Even if Monday doesn't prove to be the low point for the market, Wilson says it makes sense for investors to start thinking about moving money into high-quality cyclical companies.

For investors who want to put that idea into action, here are 11 stocks that could be a compelling opportunity. They are all rated "Overweight" by Wilson's firm, and they all performed well following at least two of the last three recessionary sell-offs, which came in 1990-91, 2000-01, and 2007-09.

They are ranked from lowest to highest based on returns relative to the rest of the stock market since the S&P 500's peak on February 19. Stocks that have had the weakest relative returns could have the most upside as leadership shifts and the market recovers.

Do you have a personal experience with the coronavirus you'd like to share? Or a tip on how your town or community is handling the pandemic? Please email covidtips@businessinsider.com and tell us your story.