Only 19 stocks made the initial cut as potential recommendations for my Safe Money Report this month, states Mike Larson, editor of Safe Money Report.

And of those 19, I only found one I wanted to include in the next issue that’s hitting members’ inboxes at noon Eastern this Friday.

Sure, my investment screening methodology is tough. It’s designed to be. Nothing but the best of the best, income-focused, higher-rated names get a shot at ending up in the model portfolio.

But you know what’s most noteworthy here? How much the list of potential candidates has shrunk!

A year ago, 38 stocks made the cut. In August 2019, before anyone had heard of Covid, 77 did.

You can see the same trend in our broader-based Weiss Ratings data.

Only 5.8% of the more than 10,600 stocks in our coverage universe recently earned “Buy” grades.

That’s down from 7% a month earlier and 10.9% this time last year.

Translation: It’s not your imagination…

It’s a Tougher Market

It’s not just the major averages, either.

They sometimes rise or fall based on how a relatively small group of mega-capitalization stocks are performing, as we saw when the FAANG companies were all the rage.

However, this is a period of broad-based weakness, with many individual stocks performing poorly behind the scenes.

Looking at the 11 sectors that make up the S&P 500 (SPX), only two are up year-to-date—the other nine are in the red, and the index itself has shed over 13% so far this year.

The Dow’s (DJI) barely faired better, having shed over 10% YTD. And the Russell 2000 (^RUT)? Down nearly 15%.

What Can You Do?

Foremost, investors need to narrow their focus. Zero in on a select handful of sectors and stocks, and avoid the ones that aren’t performing well…like communication services, the only S&P sector that’s not been in the green over the past month.

Additionally, don’t give your losers too much leeway. Cut ‘em loose sooner and move on. We’ve found success in Safe Money with more defensive, higher-yielding names, for instance.

Those Safe Money stocks are in sectors like healthcare, consumer staples, and utilities. They’re tailor-made for an economy that’s either in recession or close to it, as they provide people’s needs, not their wants.

It’s no surprise, then, that the Utilities Select Sector SPDR Fund (XLU) is up around 5% this year, or that the VanEck Pharmaceutical ETF (PPH) is essentially unchanged.

That isn’t knock-your-socks-off performance...but it sure beats the losses the major averages are spinning off.

The recent oil and gas sell-off is creating bargains in the energy sector, too. You can find high-quality producers spinning off market-crushing dividend yields while racking up those coveted “Buy” grades from our Weiss Ratings system.

Bottom line? Yes, it’s tougher to find winning stocks today. But no, it’s not impossible.

Visit Safe Money Report here.