Another place investors may turn to for a defensive approach is dividend-paying stocks. The following fund offers about 100 dividend-paying companies. Some are in defensive industries, such as consumer staples, pharmaceuticals and utilities, although some are also in the beleaguered financial sector.
- iShares Dow Jones Select Dividend Index (DVY): down 2.9% year-to-date; yields 5.5%
Consumer staples can also be an option. While consumers might delay buying a new television or upgrading that clunky, slow computer, few consumers would put off buying toothpaste, toilet paper and certain basic foods. Consumer staples ETFs can be an appealing option for investors who want to capitalize on this notion.
- Consumer Staples Select Sector SPDR (XLP): up 2.7% year-to-date
Remember that having a strategy, no matter the market condition, is necessary. We follow the 200-day moving average. By watching market trends and following through with your strategy in place, losses will be kept to a minimum and emotions will be left out of the equation.
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