An alternative in investing in equities is formed through the most defensive or conservative securities. So that in this way, investors are in a better disposition to protect their positions in the financial markets. Whichever you are. Not only in the stock market, but through other more aggressive financial products (warrants, credit sales or even future options). So that they can operate in all equity scenarios, including the most unfavorable ones for their interests.
It is a strategy that, although it is safer, does not guarantee a fixed return. Because in effect, at the end of the day it is the stock market with all the characteristics that it contributes to open operations in the financial markets. In any case, are movements that are aimed at a very well-defined investor profile. User of a certain age, without predisposition to risk and who requires greater security in their operations as the main signs of identity. Based on these simple premises, they will be in a position to opt for this peculiar kind of investment.
In all the stock exchanges, including the Spanish one, there are always values of these characteristics. They are presented with minimal volatility compared to other equity propositions. They belong to very diverse sectors such as satisfy your demand from now on. It is an investment, which is neither better nor worse than others, but simply different and which is adapted to a series of highly localized investors in terms of its purposes.
How are defensive values?
Of course you can identify these values with some ease. One of the strategies is to check the evolution of listed companies. Because in effect, they do not usually develop large differences between their maximum and minimum prices. But on the contrary, they show little difference in their daily quotes. To the point that they are values with which it is very difficult to perform intraday operations. That is, on the same day and requiring greater agility in their daily assessment. It is something that is unmistakable to all of them and almost without exception.
Another of their main characteristics resides in the fact that they are usually supported by a very large volume of negotiation. Where many buyers and sellers change titles. Although they are usually large and mid-cap companies, companies with a lower specific weight are also present in the most relevant equity indices. Not surprisingly, defensive stocks are one of the most valued by small and medium investors. With a class of users loyal to these proposals to interact with the world of money.
But first of all, it will be necessary to clarify which are the stock market sectors most likely to incorporate this class of so special values. Well, some will be known to all, but there will be some other novelty that may surprise you from this precise moment. To the extent that they are proposals that are the object of analysis by the management companies in charge of preparing the investment funds. So that in this way, you are in the best of conditions to define your strategy to make your savings profitable with greater guarantees of success.
All electrics in general
If there is a defensive sector par excellence, it is none other than the one represented by the electricity companies. They meet all the requirements to belong to this select club of national equities. In addition, they allow you to collect the dividend payments with which they contribute to their shareholders. With an annual and fixed return that ranges between 3% and 8%. So that in this way, you can have a fixed income within the variable. As a reward for the most conservative investors in the financial markets. In any case, they should not be missing from your investment portfolio.
This class of securities is also characterized because its behavior is much better in the remaining proposals of the stock market in the most unfavorable scenarios for financial markets. Although on the contrary, they have the opposite effect in bullish movements. Since its revaluations are not as powerful as in the other values of the variable income. In any case, through them you will not become a millionaire, but for the same reason you will not be ruined if you opt for some of them. They provide you with greater stability to the positions you open in any economic scenario.
The food sector: defensive
If you want to opt for defensive stocks, you will not be able to forget in any case the companies linked to food. To the extent that they can revalue even in the most worrying moments for financial markets. With better behavior than others. It will be one of the guarantees that you will provide these values. Because also the volatility they present is almost nil. It will, in short, be a very important benefit to defend your interests as a small and medium investor.
However, one of the drawbacks of contracting these stock market proposals is the little offer offered by the Spanish stock market. Because in effect, you will not have too much space to choose from. Rather, you will have to analyze in greater detail the indices of this geographic area. You will have more problems than expected and in all cases under a limitation in the lines of business developed by the companies included in this very defensive sector.
Ebro or Campofrio they will be some of the few values that satisfy these needs in the investment that you present. You will have no choice but to go to other international places where the offer is greater. As for example, in French or North American equities. Although in exchange for assuming more expansive commissions than those enabled in national markets. It will be one of the requirements that you will have to meet to fulfill this desire you have to invest in the most defensive securities.
Of course, one of the strategies that you can use from now on is to include any of these values in your portfolio. Under the most appropriate percentages depending on the profile you present as a retail investor. In all cases, they will provide you with greater stability and will prevent you from having fewer headaches when things do not develop as you expected from the beginning. It is a small tax that you will pay for using this very special strategy.
Insurers are not lacking either
How could it be otherwise, insurance companies are another of the proposals that should not be lacking in this peculiar appointment. Because they provide a stable and consolidated line of business through their business accounts. Although with the serious problem of the few offers that are proposed from this sector. With so little values that they fail to satisfy the demand of investors. To the point that within the Spanish stock market they are only represented by Mapfre and Catalana de Seguros. As you can see, very few suggestions to make the savings profitable.
If this is your wish, you will have no choice but to go to the stock market of the old continent. Where the most important companies in this sector are represented. In particular, the german equities which is the one that includes the largest number of companies of these characteristics. Of all kinds and with all kinds of business lines. Indeed, they are defensive securities but with a series of proposals that are insufficient for your interests to open positions in the equity markets.
Large distribution centers
These companies are part of the most conservative investment of savers. Although with the same deficiencies as in the previous cases. In particular, with regard to the Spanish stock market. Where DIA is one of the few representatives that you have to formalize purchase operations. You will also have to go to other financial markets to meet your goals. For a very simple reason to explain. Because most of the large distribution centers are not publicly traded. The examples are very striking: El Corte Inglés, Mercadona or Eroski are some of them.
Either way, it is always a sign of stability to keep savings. And that they even distribute dividends among their shareholders to raise their interest in the eyes of stock market users. It is not as strategic a sector as the previous ones and also with more limited proposals than in all cases. To the point that it is more replaceable than those already mentioned. With a higher recruitment volume During the last years. In a bid to attract a greater number of small and medium investors.
In short, you have many proposals in the most defensive sectors of the financial markets. Now it will only be you who has to choose which are the most correct proposals to make your assets profitable from now on. Regardless of the fact that conservative proposals are also available in other financial assets, including those from fixed income. For example, public debt, gold, bonds and at some point even oil could be used. In some of the cases, with a very important revaluation potential.
Defensive investing, on the other hand, is a part of the money world that you should analyze. Mainly because it will give you more peace of mind in the face of possible distortions in the financial markets. Not surprisingly, it will be an alternative for you to make the savings profitable.