Don’t Be Fooled by the Protection of Defensive Stocks

Constant bullish advice only works in bull markets Just the thought of a double-dip less than a year after the economy began pulling out of the last recession is agonizing. Just the thought of another bear market in stocks so soon, with the S&P 500 still 30% below its peaks of 2000 and 2007, is unbearable for many. Illustrating the emotional problem, in a recent e-mail dialog, the well-known anchor of a financial TV show explained to me why he is constantly arguing with analysts trying to warn investors, rather than letting them have their say, why he is trying to present a positive outlook for the market. He said, “My portfolio is still 36% below where it was 10 years ago, and …