What Is A Defensive Investment Strategy?

What does a defensive portfolio look like?

A defensive investment strategy entails regular portfolio rebalancing to maintain one’s intended asset allocation; buying high-quality, short-maturity bonds and blue-chip stocks; diversifying across both sectors and countries; placing stop loss orders; and holding cash and cash equivalents in down markets..

What are the best defensive stocks?

Best Value Defense StocksPrice ($)12-Month Trailing P/E RatioMaxar Technologies Inc. (MAXR)27.666.2Huntington Ingalls Industries Inc. (HII)143.6111.2General Dynamics Corp. (GD)139.4512.4Sep 24, 2020

What sectors are defensive?

The Defensive super sector has three sectors: Consumer Defensive, Healthcare, and Utilities.

Is gold a growth asset?

It is a commodity, and commodities are almost universally seen as growth assets. Gold has also historically exhibited price volatility that is similar or even slightly higher than the equity market. Gold also delivers no income stream, with capital growth the only way it can provide a return to investors.

What is a defensive investor?

Who is the Defensive Investor? The defensive investor is unwilling, or unable, to put in the time and effort required to be an enterprising investor. Instead of an active approach the defensive investor seeks a portfolio that requires minimal effort, research, and monitoring.

What is an example of a defensive stock?

Water, gas, and electric utilities are examples of defensive stocks because people need them during all phases of the business cycle. Utility companies also get another benefit from a slower economic environment because interest rates tend to be lower.

How do you build a defensive portfolio?

The overarching theme to building a defensive portfolio is to focus on high quality companies with strong cash flows, reasonable valuations, and a solid history of operation. When the market experiences a downturn, you want to own companies that have the highest chance of withstanding the storm.

Is gold a defensive asset?

While cash, gold and Treasuries are all considered defensive asset classes, each arrives at that characteristic in a different way. Cash has historically provided stability in the form of very low volatility, along with a lower return. By contrast, gold has produced a high return along with high volatility.

Is gold a liquid asset?

Silver and gold are very liquid assets. They can be sold for cash on the spot.

What is defensive growth?

The Defensive Growth option is uniquely structured to adjust its exposure to a range of growth and defensive assets, based on the performance and confidence of investment markets at any point in time. When investing in growth assets, it does so in a way that aims to reduce volatility.

What are the 5 asset classes?

The 5 asset classes funds invest inShares (also known as equities). For more information, read our guide ‘What are shares and how do I buy them? … Bonds (also known as fixed-interest stocks). These are a form of IOU issued by governments and companies when they want to borrow money from investors. … Property. … Commodities. … Cash.

What are the 4 investment strategies?

Investment Strategies To Learn Before TradingTake Some Notes.Strategy 1: Value Investing.Strategy 2: Growth Investing.Strategy 3: Momentum Investing.Strategy 4: Dollar-Cost Averaging.Have Your Strategy?The Bottom Line.

What are the best defensive stocks to buy?

Top defense stocksCompanyDefense FocusNorthrop Grumman (NYSE:NOC)Nuclear efforts, bombers, spaceGeneral Dynamics (NYSE:GD)ShipbuildingRaytheon Technologies (NYSE:RTX)Electronics and missilesLeidos Holdings (NYSE:LDOS)Government service2 more rows•Oct 5, 2020

Is Apple a defensive stock?

Investment bank Cowen has raised its AAPL price target to $470 on Apple’s better-than-expected June quarter results and its continuing status as a “defensive” stock. … The results have set an “encouraging outlook” for Apple into 2021, based mostly on continued Services momentum and the upcoming “iPhone 12” cycle.

What are defensive assets?

Defensive assets consist of more stable investments with steadier returns. Because they usually carry lower risk levels, defensive assets are more likely to generate lower levels of return over the long term. We usually expect defensive assets to provide returns in the form of income.