A Refresher on Defensive Investing


Roger Arnold

 | Jun 25, 2014 | 6:00 PM EDT
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With the announcements this morning from the U.S. Commerce Department's Bureaus of Economic Analysis and Census that real first-quarter annualized GDP was revised to a contraction of 2.9% and that durable goods orders for May -- the second month of the second quarter -- decreased by 1% since April, now is a good time to review defensive investing.

One of my general themes of the past few years has been taking a defensive position by way of investing in sectors that are traditionally affected less by poor economic activity because the goods produced by them must be consumed. My preferred defensive sector has been grocery stores, which I last wrote about in January. In that sector, the two names I like the most continue to be Safeway (SWY) and Kroger (KR). So far this year, Safeway and Kroger shares are up about 17% and 25%, respectively, compared with the S&P 500's approximately 6.5% return. That's a stellar performance for any stock, but truly impressive for mature companies in a low-margin business....483 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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