If you’re looking to make a safe bet for your portfolio, consider buying consumer defensive stocks. These stocks offer several benefits all at once, and are often a great investment even in a poor economic climate.
Defensive stocks are stocks that typically pay dividends. During tough times, dividends are nice. When you buy consumer defensive stocks, you can be assured that your money is safe and you will be able to get an income from it. This will help you through the stock market slump.
Consumer defensive stocks usually come from larger, more established companies. They are less volatile than other types of stocks, and the price is usually higher. Typically, these companies manufacture food, beverages, healthcare providers, packaging, and utility services.
The term “defensive” is used because the goods that these companies produce are often needed during bad economic times. Generally, these companies have low liquidity. In fact, they rarely go on sale. But if the economy turns around, they will be a great investment for your portfolio.
A good example of a consumer defensive stock is Walmart. The company has an extensive product line, and has an excellent reputation for consumer-friendly products. You can also buy shares in the Procter & Gamble Corporation (PG), which specializes in health and beauty products.
There are also a number of other stocks that fall into this category. Other examples include PepsiCo, Inc. and Costco Wholesale Corporation. However, these are not always the best choices, as they are not the best performers during bull markets.
In fact, consumer defensive stocks are more likely to pay you dividends, which is a reason why they are a popular choice among investors. While consumer defensive stocks aren’t the most popular investment type, they are a great way to hedge against a stock market shock or financial collapse.
Consumer defense is the name given to the practice of protecting consumers from deceptive and unfair practices. These practices can include advertising, sales practices, and product warranties. By protecting consumers, the government and business community are better able to serve their needs.
To learn more about consumer protection, you can read the Consumer Protection and Defense Code. This code is a comprehensive set of standards designed to protect consumer rights. It is a collaborative effort involving a variety of government institutions, as well as businesses and the civil society.
The right to choose refers to being able to purchase a wide variety of items at competitive prices. Additionally, the right to safety protects consumers from hazardous products. Using an unsafe product can lead to illness or death.
Another benefit of consumer defensive stocks is that they are often the first foray into value investing. Although they tend to pay dividends, they aren’t the most profitable stocks in a bull market. So, be patient and don’t take on a lot of risk. Eventually, these stocks will reward your patience with growth and dividends.
For investors who want to build their portfolios and hedge against a stock market downturn, consumer defensive stocks are a wise investment.
