The exit from the pandemic will be bumpy. Defensive stocks with attractive valuations can help provide balance through an uncertain recovery.
Global stocks rebounded sharply from the coronavirus market crash in 2020, but the ride was rocky. With so many risks clouding the outlook, we believe that investors should focus on generating a smoother pattern of returns through the recovery from COVID-19.
Defensive equities are usually found in sectors that have withstood market shocks, such as utilities and real estate. But as COVID-19 shakes up investment conventions, companies with intangible assets are being more appreciated for their volatility cushion.
Target-date portfolios that use carefully chosen defensive equities are best equipped to protect from coronavirus market turmoil and volatility in general.
Following these guidelines can help equity investors navigate the uncertainty created by the COVID-19 pandemic when selecting stocks and positioning portfolios.
Even as global stocks climbed in 2019, market volatility persisted. By some measures, lower-volatility stocks now look quite expensive. But in fact, high-quality stocks that can help protect portfolios can be found at reasonable prices, if you know where to look.
The most closely watched part of the US yield curve inverted this week for this first time since 2007, suggesting that a recession may be around the corner. We’re not convinced that’s true.
Global stocks rebounded in the first quarter, but the ride was rocky. Even in a rising market, volatility is a clear and present danger. With so many risks clouding the outlook, we believe that investors should focus on generating a smoother pattern of returns.
Recent volatility reminds us that new risks are testing standard defensive equity strategies. Portfolios that offer downside protection need to go beyond standard risk models and position themselves for changing challenges ranging from trade wars to European political instability.
Technology stocks are widely seen as powerful return drivers—with a lot of volatility attached. But surprisingly, shares of many companies that enable the technology revolution can provide solid returns and even downside protection.
After a fantastic year, concerns are growing about a potential downturn in the stock markets. At times like these, it’s especially important to focus on investing strategies that can deliver a smoother pattern of long-term returns.
Changing market conditions over the last five years have taught us a few things about managing risk. The most important lesson? Delivering downside protection constantly requires refining and adjustment.
From nuclear tensions with North Korea to turmoil on the streets of Charlottesville, political risks have been hovering over equity markets again. We think investors should be on alert for a potential resurgence of volatility.
Disruptive forces are wreaking havoc across the global business world. But not all disruption is fatal. Lots of companies are facing the threat—and thriving. We think they deserve more credit than investors are giving them.
Stable stocks are out. Riskier reflation plays are in. But who knows which way fickle market winds will blow tomorrow? That’s why strategies that harness stability and good judgement never go out of style.
Rising rates are typically good for stocks, especially when they’re rising because of a strengthening economy. That should mean better days ahead for many post crisis laggards. But a lot will depend on how inflation behaves.
Though stable stocks are expensive and look vulnerable to rising interest rates, we still see ways to build a winning defensive portfolio. But it’ll take some unconventional thinking.
