With many big-ticket stock sectors like technology and oil in rapid flux due to the trade war, slowdown fears, and more, traders might need to get a little more creative with their investments in 2019 if they want to turn a profit. According to Reuters, one safe play to consider for a defensive stock is consumer staples.
To be specific, a consumer staple is a product that people buy regularly as a part of their normal expenditures. Food, household items, and to a degree, tobacco, are all consumer staples that, as long as consumers have money to spend, will always be purchased. Since the future of growth-oriented sectors like tech are so uncertain right now, consumer staples make for a great defensive stock. While they’re probably not going to see much, if any, growth, they are guaranteed to continue turning a steady profit barring any unforeseen disasters. Savita Subramanian, Bank of America’s head of U.S. equity and quantitative strategy, said that “utilities offering 6 to 8 percent total return with a lower level of risk might actually be a good place to be in an environment where volatility is rearing its head.”
Utility stocks tend to go under the radar, but if you’re a trader and you need some steady income, they may prove to be a safe haven until the market stabilizes.