A rather typical assumption is that the industries least affected by a recession are those that are tied to human necessities - our need for water, food, healthcare etc. So some of the traditionally strong buffer against bear markets are:
1.ultility companies (water, gas, electricity),
healthcare organisations and their suppliers (that are tied to traditional basic heathcare eg. hospitals, not high SES boutique beauty/skincare/plastic surgery)
consumer staples (food providers, agriculture),
4.and arguably Apartment REITS as well (in singapore's context, we have the Ascott Residence Trust, but I wouldn't truly consider that a defensive REIT given that it has alot of Apartment hotels overseas and expensive condominium complexes in Singapore, so not a truly apartment like a normal HDB flat)
Basically, these industries have low beta, meaning that their stock price volatility is not so much tied to the market's overall performance, but more of their own demand and supply. Meaning when markets move up, they might move down or up slightly, but when markets move down, they may move up significantly, or down just slightly, or have no change at all.
However, being traditionally defensive is not the one gospel truth in the financial markets. Take a look at Austrialia's recent downturn, their consumer staples shares were one of the worst performing in the market. Being defensive will not save you if consumers are looking to cut back on spending on everything.
https://www.bloomberg.com/news/articles/2019-04...
So my advice: perhaps look towards fixed income instruments - sometimes our fixation on equities leave out the world's largest markets that can provide that risk protection and diversity you need in your portfolio. A good government/corporate bond of reputable status and healthy Cash Flow statement can provide you the returns you need when everything else heads into the red.
A rather typical assumption is that the industries least affected by a recession are those that are tied to human necessities - our need for water, food, healthcare etc. So some of the traditionally strong buffer against bear markets are:
1.ultility companies (water, gas, electricity),
healthcare organisations and their suppliers (that are tied to traditional basic heathcare eg. hospitals, not high SES boutique beauty/skincare/plastic surgery)
consumer staples (food providers, agriculture),
4.and arguably Apartment REITS as well (in singapore's context, we have the Ascott Residence Trust, but I wouldn't truly consider that a defensive REIT given that it has alot of Apartment hotels overseas and expensive condominium complexes in Singapore, so not a truly apartment like a normal HDB flat)
Basically, these industries have low beta, meaning that their stock price volatility is not so much tied to the market's overall performance, but more of their own demand and supply. Meaning when markets move up, they might move down or up slightly, but when markets move down, they may move up significantly, or down just slightly, or have no change at all.
However, being traditionally defensive is not the one gospel truth in the financial markets. Take a look at Austrialia's recent downturn, their consumer staples shares were one of the worst performing in the market. Being defensive will not save you if consumers are looking to cut back on spending on everything.
https://www.bloomberg.com/news/articles/2019-04...
So my advice: perhaps look towards fixed income instruments - sometimes our fixation on equities leave out the world's largest markets that can provide that risk protection and diversity you need in your portfolio. A good government/corporate bond of reputable status and healthy Cash Flow statement can provide you the returns you need when everything else heads into the red.