Even after 2012, Sacknoff says, defense spending may not abate much as the government uses much of its defense budget to replace things left behind in the wars. That includes bullets, tanks and other equipment.
Many defense companies also benefit from diversification, Sacknoff points out. Many of them have their hands in commercial projects, cyber security and even clean energy. These companies are well aware of the cycles and have positioned themselves to cope as defense spending ebbs and flows.
For more information on the aerospace and defense industries, visit our aerospace & defense category.
- PowerShares Aerospace and Defense (NYSEArca: PPA): up 22.8% year-to-date; Boeing is 6.4%
- iShares Dow Jones US Aerospace (NYSEArca: ITA): up 25.8% year-to-date; Boeing is 7.4%
Max Chen and Heather Hayes contributed to this article.