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Hello Crazy Folk,
Let's look at defensive shares. These are stocks which traders pile into when other shares around them fail.
Defensive shares are popular in hard times. Or at least in uncertain times, like the ones we're now going through. A defensive share is one which does not fall as much as all the others when the markets as a whole fall off a cliff.
Roughly speaking a defensive share is linked to companies which make stuff or do things which we can't really do without. Non luxury items and services, in other words.
When times are hard people go without new tellies, computers and games consoles. They can manage without foreign holidays, air travel, new cars and even second hand cars, together with designer clothes.
They can do without gold rings, posh watches, chocolates and well, you know what I'm getting at.
But even when money is short - caused this time by previous pigging on the old credit cards and paying silly prices for houses - we cannot do without food. So supermarkets have defensive shares. We can't do without central heating oil and gas. So these are defensive shares, too.
Others in the same category are electricity shares, water stocks and pharmaceuitcal goods. Nobody wants to stay ill.
It might be time for me to buy more defensive stocks in case a recession sets in. I don't think it will personally. But you never know and it always pays to be prepared. God bless!
To find out more about Malcolm CLICK HERE
UKSA is the leading independent organisation for private shareholders in the United Kingdom. It campaigns to protect your rights as a shareholder and runs educational activities for members.
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