What are Good Defensive Stocks to Invest In?

In today’s difficult financial climate, do you believe there are any good stocks to buy? Of course there are! Regardless of the market we are now in, whether it’s a bear market or bull market, money can be made in the stock market. Here are some ideas for stock investments in the new year, as this chaotic and turbulent year comes to an end.

At this time, many analysts and other experts are recommending that good stocks to invest in are defensive stocks. Things like consumer staples, utilities and healthcare would be considered part of the defensive sector. Numerous analysts are also recommending that people invest in big multinational companies that have a well known presence in the emerging markets. This will afford you the opportunity to leverage the tremendous growth in developing economies but also provide you with the financial strength you need to endure any downturns.

Defensive Stocks – Strong Now, Strong Later

Johnson & Johnson (JNJ) – In an industry that is constantly increasing in size, they are the biggest worldwide health care company. They are known for well established brands of consumer products worldwide. Additionally, their business in medical technology is robust. The world’s population is getting progressively older with increasing numbers of the elderly, a large and growing middle class in the emerging markets and simply,  the influence of the health care industry in general.

Exxon Mobil (XOM) – This is another promising company that indicates positives at every turn.

On the US stock market, this is the largest company by market cap. They are therefore, an asset that would provide refuge when the economy is failing. Along with their defensive qualities, this company has strong growth prospects for the future.

Growth Stocks – Speculation Play

Google (GOOG) – Over the last 10 years, this stock has been increasing dramatically. There seems to be no stopping them. Their market share is increasing and so is the market itself on the fundamental side. The company has recently established their social networking space and released Google+.

Apple Inc (AAPL) – Another technology stock that shows strong potential for growth. The stock rises rapidly with the release of each new devise such as the iPhone or iPod. I cannot imagine them changing their outlook any time in the near future as they have the glitz and glamour feature.

Cyclical Stocks – Stocks to Buy in Good Times

During times of economic increase, cyclical stocks are the ones in which you want to invest. Just as a recession is transitioning into a sustained recovery, is the most opportune time to invest into these kinds of stock.

Ford (F) – I am impressed with this company for a number of reasons. They were one of the few that did not require a bailout from the government and therefore, earned my respect.  They persevered without outside influence or support and survived.  They are currently thriving.

JC Penny (JCP) – This is referred to as a consumer discretionary stock. During healthy economic periods, these companies do well as they provide goods and services that are not entirely necessary for people to survive.

Tips & Hints on how to find blue chip stocks

Have you ever thought about stock market investing and considered how blue chip stocks  might help in attaining your ultimate goals financially? In the game of poker, the most valuable poker chips are the blue ones, which is where the term Blue chip stock got its name. When individuals invest in these valuable blue chip stocks, they are in fact investing in well established, reputable companies. These companies have minimal liabilities, stable earnings and high credit ratings.  Additionally, they have a well established customer base and wide ranging lines of product.

Blue chip stocks are considered quite stable, safe investments and that is their biggest advantage. Individuals are fairly sure of positive returns on their financial investments, when they procure stocks and shares in well established companies like Coca-Cola, Wal-Mart, Microsoft, Disney or McDonalds.  In the stock market, blue chip stocks are often thought of as a sure winner, a home run. Because of this, blue chip stocks are eagerly sought by non-profit organizations with small budgets and the need for safe financial risk, as well as retirees looking for conservative, solid investments in planning their future.

The biggest problem with purchasing blue chip stock, however, is of course, the high price per share. Small investors, therefore, have a more difficult time trying to base their portfolios on these desired blue chip stocks. Since the returns on these stocks are known to be relatively modest, individuals would not enjoy the thrill of being able to state that they were a part of the rise of some unknown organization to the top of that industry, nor would they have the opportunity to become overnight millionaires.

What are bellwether stocks

Sometimes, blue chip stocks are called bellwether stocks, even though they are not precisely the same and are not exchangeable. A company that is a leader in its industry and often used by analysts in determining or forecasting the performance of that industry, are referred to as bellwether stocks. As highly valued companies are usually industry leaders, bellwether stocks are usually blue chip stocks as well.  This does not, however, mean that a blue chip stock is a bellwether stock.

The most well known and established listing of blue chip stocks  in the world, is believed to be  the Dow Jones Industrial Average. It was created be Charles Dow, editor of the Wall Street Journal and the founder of Dow Jones & Company.  It is an index of 30 stocks used and quoted by analysts to provide a depiction of the overall performance of the stock market.

There are a number of ways for individuals to purchase shares and stocks if they wish to invest in blue chip stocks.  Some of these methods are through a stock broker, a direct purchase stock plan or a dividend reinvestment plan. Individuals could choose, instead, to invest their money in a mutual fund made up of numerous blue chip stocks which would lower their risk even more.