Tips to playing defense in your stock portfolio

Playing a defensive investment strategy potentially helps uneasy investor’s weather economic downtown and/or bouts of market volatility within their portfolio. But what makes your portfolio defensive vs offensive? There are some key differences that may help you manage risk while maintaining a robust equity portfolio.

Tilt Toward Value

Growth stocks and value stocks are opposite investments styles. Companies that are established are more likely to be considered value stocks. Established companies may be more conservative with spending and emphasize paying dividends over reinvesting profits.   

Seek Dividends

Stock prices can be unpredictable; dividend payments tend to be steadier and more directly reflect a company’s financial position.

Temper Volatility

Certain mutual funds and exchange-traded funds labeled “minimum volatility” or “low volatility” are constructed with an eye toward reducing risk during period of market turbulence.

There is no assurance any investment strategy will be successful. Investing involves risks including the potential loss of capital. Dividends are not guaranteed and will fluctuate.

All opinions expressed are those of the author and not necessarily those of Raymond James. Opinions expressed are as of this date and subject to change at any time without notice.

Tag Cloud