As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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Saturday, 10 December 2011

Defensive stocks???

Just For Thinking ...

Does defensive stock exist in the stock market? e.g Singtel, starhub, sph, singpost, smrt, etc

Or investors have confused dividend yield or income stocks as defensive stocks? You see how the stock price of singpost has fallen. Scary hor. Hardly defensive.

11 comments:

  1. Hi Uncle,

    if a "defensive" stock is determined by its beta, then yes, there is a term call "defensive stock".

    ReplyDelete
  2. Hi CW,
    Everything being equal, defensive stocks to me means after every 'Melt-down of the Markets, the stocks are still around. Not only around, the companies of these stocks will be able to prosper again as the economy improves.
    So you see cyclical stocks can be a "defensive stock" too if you are not a "dividend income investor"
    Cheers!

    ReplyDelete
  3. From Wikipedia:

    "Defensive stock are stock that provides a constant dividend and stable earnings regardless of the state of the overall stock market."

    So, by definition, Singpost is a defensive stock. ;)

    ReplyDelete
  4. Hi AK71,(Excuse me CW),

    So are VICOM, APB, SMRT, F&N, CEREBOS and many more. They all seems to be "very boring stocks" Actually if you follow a market long enough you will "instinctively' know which are the defensive stocks. Mr Market will tell you so.
    My 2 cents.
    Cheers!

    ReplyDelete
  5. Hi Temperament,

    Yes, let me throw in my 2 cents in agreeing with you. 8-D

    Prices of defensive stock will still take a few knocks. That is just price.

    Defensive stock does not mean that they have ironclad stock prices.

    Indeed for some investors, they would take advantage of weakness in prices to accumulate. :)

    ReplyDelete
  6. Hi AK71,
    Actually hoh, i depend on some of these defensive stocks to survive in the market. Ha! Ha!
    Sorry i can't decode 8-D.

    ReplyDelete
  7. Hi Temperament,

    SPH is my single largest investment in a blue chip. ST Engineering is an investment from my early days as an investor. People have called them boring and some even called them lousy stocks but their steady, plodding style and the regular, predictable dividends outperform FDs and beat inflation.

    So, we are on the same boat.

    8 = glasses

    - = my nose

    D = a big grin

    8-D = me grinning

    ReplyDelete
  8. What I leanrt from the recent sub-prime crisis is that all stocks tumble down regardless if it is bluechip, defensive stocks, midcap or penny stocks. They come down at different level.

    So when bear market appear, I will run for life. Come back again when the dust has settle down.

    ReplyDelete
  9. Hi ANON,
    You said:-
    "Come back again when the dust has settle down".
    Interesting! May we learn from you how you do it?

    ReplyDelete
  10. Wow! I bow in deference to anon 13:00.

    There is wisdom in the question!

    Dragons and pythons intermingling here :)

    ReplyDelete

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