Success in the stock market is all about balancing risk and reward.
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New York, United States (PRWEB) April 09, 2015
Daily Gains Letter (http://www.DailyGainsLetter.com), an e-letter published by Lombardi Publishing Corporation, a 29-year-old consumer publisher that has served over one million customers in 141 countries, is revealing that to balance risk and reward, the top stocks to consider in the current economic conditions are defensive stocks and dividend-paying stocks.
“Success in the stock market is all about balancing risk and reward,” says financial analyst George Leong. Too much risk and an investor leaves him or herself vulnerable to added downside when the stock market turns, as may be the case at this time. However, too little risk and the investor doesn’t fully partake in the upside moves of the stock market, though his/her downside risk is lessened. The key is to understand the stock market we are in and alter one’s investment strategy accordingly, says Leong.
Leong explains that while the stock market seems to want to go higher, there’s also a sense of hesitancy surfacing that will likely make gains much more difficult to come by this year. This is the time when investors may want to review their portfolio and determine the associated risk. Those who have made solid profits with higher-beta stocks may want to shift some capital from these higher-risk momentum stocks to lower-risk, low-beta ones.
“After bottoming in March 2009, the Consumer Discretionary Select Sector has since climbed more than 420%,” he adds. “Investors should consider looking at large-cap cyclical stocks that trade with the economy and jobs; instead of technology, consider sectors such as automotives, furniture, retail, travel, and restaurants.”
“Should the economy turn downward, investors may want to look at the defensive sector—those companies that make everyday-use products, such as toothpaste, toilet paper, soap, and shampoo,” Leong concludes. “The businesses may be boring, but in this economic environment, investors can’t go wrong considering and researching defensive and conservative dividend-paying stocks.”
For more information on Daily Gains Letter, visit http://www.DailyGainsLetter.com. Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation visit http://www.lombardipublishing.com.