Considering the current crazy stock environment, let’s talk defensive investing.
Let’s face it: Investing is about managing risk, not avoiding it. So how do you invest looking forward?
Well, if you are a little gun-shy these days, or nearing retirement, you should be thinking about defensive stocks as part of your asset allocation.
These are recession-resistant sectors like necessary services:
- Utilities is one of the first flights to safety.
- Consumer staples is another good one -- think packaged goods companies that make things like toilet paper and hand sanitizer.
- Pharmaceuticals is another.
- Soft drinks and candy, too.
Most of these companies offer dividends that plump up your portfolio without adding to the risk. Then there are the essentials such as food and energy.
Further reading:
More: Money Monday section