On the defensive
Published in the Financial Review, August 2008
By David Potts
The question of what constitutes a defensive stock in the current volatile environment is a controversial one.
There is no such thing as a defensive sector in the sharemarket anymore, Clime Asset Management argues, but there are still defensive stocks around.
‘The financial sector was the epicentre of the bear market so that wipes it out as being defensive, says AMP Capital Investors’ Shane Oliver. ‘Consumer staples and telcos are all there is now,’ he adds. Telstra and Coles-owned Wesfarmers are probably not defensive, and neither is the resources sector. Woolworths may be.
As for what will ride the eventual wave of market gains, Wealth Within’s Dale Gillham recommends the top 50 stocks. His favourite is QBE Insurance Group. Meanwhile, healthcare stocks Cochlear, CSL, ResMed, and Ramsay Health Care are as safe as they are sound.