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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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10 Ways to Build a More Defensive Portfolio |
Benzinga - May 22, 2011 - By Jay Peroni
In light of current economic conditions, we at FaithBasedInvestor.com are starting to go into “defensive” mode. During upward bull markets, a little offense goes a long way. However during times of high volatility and downward momentum, it is often best to be safe rather than sorry. That is where a good “defense” comes in handy.
In team sports, especially football, defense often wins championships. That is why we wanted to show you ten ways you can add a little “defense” to your portfolio strategies.
1. Load up on cash & money market accounts. Any defensive strategy should have loads of cash to take advantage of any future prime opportunities as well as to protect against the downside. These accounts may earn relatively small returns but are considered a safe haven. Most people wished they had a whole lot more cash in their portfolios during the 2000-2002 stock market crash as well as during the financial crisis of 2007-2009. We believe right now is a prime time to be heavy in cash.
2. Consider short-term U.S. treasuries (1-3 years max). Yes, we are not too bullish on the long-term prospects of U.S. debt, but short term treasuries like (NYSE: SHY), can offer a bit more yield than a money market. Additionally as rates rise, the yield on this ETF will also rise. Short-term treasuries provide a minimal return so they should only make up a relatively small portion of the overall portfolio. However these investments will add stability to your portfolio. T
3. Consider inflation-protected securities. Inflation can significantly reduce your returns over time. Whenever I consider an investment I look at taxes and inflation. Treasury Inflation-Protected Securities or TIPS (NYSE: TIP) provide a hedge against inflation as they track the consumer price index (CPI). The price of TIPS is adjusted to keeps pace with inflation. Another inflation protected to consider is one that tracks world inflations such as (NYSE: WIP).
4. Consider stable foreign currencies. In order to hedge against fiat currencies (those not backed by a precious metal) that are relatively unstable at this juncture, consider more stable currencies like the Swiss Franc (NYSE: FXF) and Australian Dollar (FXA). With the U.S. dollar and Euro in crisis mode, more stable currencies can provide some much needed protection.
5. Consider adding more corporate bonds. Look for stable companies that have a solid balance sheet and paying a good yield. By purchasing a company’s debts rather than its stock, you have less upside potential but often more stable returns. These bonds typically pay a higher return than government or municipal bonds because of their higher risk. By carefully researching the credit ratings of companies before purchasing their debt, you can often minimize your risk. I am not a big fan of bond mutual funds, but you can look at ETFS that track bond indexes or consider purchasing individual corporate bonds.
6. Consider purchasing “defensive stocks”.Stocks with low volatility and consistent dividends can provide some defense to your portfolio. These types of stocks will have the potential to provide both growth and income to your portfolio. Keep in mind, most equities tend to rise or fall together. More defensive industries like health care, energy, consumer staples, and utilities may hold up relatively well during a market sell-off, but they still can fall in value during bear markets. To minimize potential losses, look for companies that do well during recessionary periods. Right now, consumers are looking to save money any way they can, but they are still buying food, toilet paper, and toothpaste. Stocks should represent a small percentage of a defensive portfolio because these types of investments still go down during bear markets and entail higher levels of risk.
7. Consider buying some physical gold and silver.Physical gold and silver always have long-term value and are always in demand. These investments have traditionally kept pace with inflation and are a great holding to have in times of crisis. Additionally these assets have low overall correlation with most other investments providing you additional diversification.
8. Consider commodity ETFS that have lower correlation to the equity and bond markets. You can look at agricultural ETFS like (NYSE: DBA [FREE Stock Trend Analysis]) or a more diversified commodity ETF like (NYSE: DBC). You could also consider an energy commodity ETF like (NYSE: OIL), a gold ETF like (NYSE: GLD) or silver ETF like (NYSE: SLV). These commodities may have downside risk, but when combined with stocks and bonds can lower the overall portfolio risk and flctuation.
Read more: http://www.benzinga.com/personal-finance/11/05/1103103/10-ways-to-build-a-more-defensive-portfolio#ixzz1NBiab0bQ
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| Stuff to look at |
Yield and Income Newsletter: A must have for income investors. subscribe NOW
S&P Commentary and Newsletters: S&P
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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