Defensive Stock Investing: Building a
Praveen Dubey (SEBI Registered RA)
SP RESEARCHVIA PVT. LTD. (INH000015808)
Strategic Capital Protection Framework
During market corrections, the goal shifts from maximizing returns to preserving capital. Building a defensive portfolio with low-beta stocks can help reduce drawdowns compared to the broader index.
What is a low-beta defensive stock?
Beta measures a stock's sensitivity compared to the market. A beta less than 1.0 indicates that the stock is less volatile than the index. For example, if a stock has a beta of 0.5, it is expected to fall only 5% if the market drops by 10%.
Top Defensive Sectors
Historically, Fast-Moving Consumer Goods (FMCG), Pharmaceuticals, and Utility stocks act as reliable defensive holdings due to steady earnings demand, regardless of economic cycles.
Written by Praveen Dubey
Chief Research Analyst | SEBI Reg: INH000015808
Statutory Warning & Risk Disclaimer: Investment in securities market is subject to market risks. Read all related documents carefully before investing. Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Content provided on this blog is for informational and educational purposes only.