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Specializing in retirement planning and personalized investment management.

Defensive Sectors

Defensive Sectors

Due to the constant demand for their products, defensive stocks tend to perform better in a declining market. There are three main defensive sectors: Utilities, Consumer Staples, and Health Care.

Utilities:
Water, gas, and electric utilities are needed in all phases of the business cycle. Utilities are usually classified as US Large Value.

Implementation: In our Base 60 portfolio, we might use 20% - 50% of a utilities fund as part of our US Large Value allocation. This means that 2.25% - 5.5% out of the 11% allocated to US Large Value might be in utilities.

Consumer Staples:
Everyday products that are still bought even in recessionary times. These include companies that manufacture food, beverages, household and personal products, and packaging. Consumer staples are generally classified as US Large Value, but there are some funds that are considered US Small Blend.

Implementation: In our Base 60 portfolio, we might use 20% - 50% of a consumer staples fund as part of our US Large Value or US Small Blend asset classes.

Health Care:
Health care and medicine is always important to people. Health care includes hospitals, pharmaceutical companies, manufacturers of medical equipment & supplies, and long-term care facilities. Health care is generally classified as US Large Blend, but there are some funds in US Small Blend.

Implementation: In our Base 60 portfolio, we might use 20% - 50% of a health care fund as part of our US Large Growth, US Large Blend or US Small Blend asset classes.