What is Defensive Investing?

In a nutshell, defensive investing simply means that you invest on stocks that are less volatile in the market compared to the average. By doing this, you minimize your principal loss, but also earn little in terms of gains.

It’s a stable, if not stagnant technique in stock market investing. Below are stocks you should look for when you’re considering this investment technique.

Stocks from Consumer Staple and Blue Chip Companies

These companies have steady, high earnings because they sell products that consumers actually need. High and stable earnings can only mean one thing for investors: stock prices that have the least probability of crashing down.

While you run the risk of investing on an almost stagnant share, you also avoid losses that most investors incur when they buy stocks that rise and fall on the charts erratically.

Stocks from Companies who have Large Share Repurchase Programs

Another option is for you to invest in the stocks of companies who have repurchase programs. Large companies like Coca Cola make efforts to own back their shares in the stock market.

This is a great assurance for you as an investor, because the company will still be willing to buy your shares back in any event that they become undervalued.