As an example, those investors that were simply willing to alter their US equity allocations and purchase defensive US sectors in their portfolios suffered less downside volatility materially than the broad market during the last two bear markets. During the last two market downturns, an investor that invested in an equal weighted composite of non-cyclical sectors (staples, healthcare, utilities, and telecom) lost an average of 13% less than S&P 500® index, and the best performing defensive sector averaged losses of roughly 20% less than the overall market.
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This article was Rick Vollaro, chief investment officer, Pinnacle Advisory Group.
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