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"Time To Go Defensive, Again?" (PEP, KO, BUD, TAP, KFT, CAG, CPB, HRL, MCD, MO, VGR, RAI, PG, CL, MRK, JNJ, NVO)
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If you ever heard the old saying "Be careful what you wish for, you may get it!" it sure seems like we are there. It also makes you wonder if it is time to go back into Defensive Stocks. The defensive stock plays are where investors plunk their money when they are less optimistic but still want exposure to stocks. The DJIA is down over 150 points on the day so far, yet some of these defensive stock plays are barely down.
Today and this week is the perfect storm for what the stock market was hoping for to deliver a rate cut:
These are the ones you eat, drink, and smoke,and they tend to be around medicines and personal products. Here are the basics for defensive stock plays:
These are far from great exciting tech plays, but this is the strategy that traditional investors have used whenever it is time to go defensive. As a reminder, if the stock market is going to really slide then almost everything falls with it. Defensive stocks in theory are supposed to fall less and are the ones that traditional investors usually start tip-toeing back into first.
Jon C. Ogg
September 7, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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