GAFM GLOBAL ACADEMY OF FINANCE AND MANAGEMENT  ®

5.  Chapter 5 -The Defensive Investor and the use of defensive stocks.

Investors’ strategy will differ depending on their time horizon and life/family issues. There are benefits to common-stock ownership, relative to other investments such as bonds. However, these benefits can be sacrificed if the buyer pays too much for the security. Using dollar-cost averaging can help mitigate the risk of overpaying for an investment. 

Defensive stocks describe shares of companies whose sales of goods and services tend to hold up well even during difficult economic conditions. Examples of industries that are substantially insulated from the business cycle are utilities, government contractors, and producers of basic consumer products, such as tobacco, oil, food, beverages and pharmaceuticals. [i] In the 21st Century, you can buy a listed ETF Exchange Traded Fund that replicates a Defensive Strategy or Hedge Fund Strategy. 

6.  Chapter 6 - Portfolio Policy for the Enterprising Investor: Negative Approach

Preservation of principle for yourself or clients is vitally important. High fee funds, Preferred stocks, low-grade bonds, foreign bonds and IPOs should be ignored under most or all conditions unless you are allotted a premium IPO on “hard to get” stock. Don’t chase interest or dividends, meaning: don’t purchase a given security because of the attractive interest payments which they provide. Many times, these stocks are vulnerable.