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Energy Stocks: A Surprising Defensive Play?

By Advisor Perspectives
Wealth Management

With volatility rising, many equity investors are thinking proactively about downside protection. But traditional safe havens may not do the job. Defensive equity positions can be found today in surprising places—like the energy sector.

After nine years of S&P 500 Index gains, investors are becoming increasingly nervous about the bull market’s durability. Rising interest rates, a return of inflation and geopolitical concerns have fueled volatility.

Rethinking Defensive Exposures

In the past, when investors sensed cracks in the market’s foundation, they flocked to more defensive sectors, like consumer staples. That sounds logical: if the economy is weakening, invest in companies with resilient businesses that sell what consumers can’t do without, such as household products, food, beverages and cigarettes.

Read more at Advisor Perspectives.

Photo: Paul Lowry

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