UPGD - Keeping Cool In Volatile Markets: The Upside Of Defensive Equity Strategies
2025-09-03 04:45:00 ET
By Kent Hargis, PhD
It’s a deeply ingrained investing maxim that risk and return go hand in hand: to get more return, you must accept more risk. So some investors may find it counterintuitive that the opposite is also true: you can take less risk and still beat the market over time. It’s a different way of defining investment success that leans on downside defenses in the pursuit of long-term goals.
Meeting investment objectives today requires a fresh mindset. Investors are facing an uncertain future, as US tariff policies shake up global trade, add risks to the global economy and stir market volatility. This follows several turbulent market episodes in recent years, from the COVID-19 economic shutdown in 2020 to the post-pandemic inflation spike in 2022. Meanwhile, equity market risks have been augmented by extreme US market concentration caused by the dominance of the US mega-cap stocks. Uncertainty often spurs unstable market conditions, which may deter investors from taking more risk to capture return potential....
Keeping Cool In Volatile Markets: The Upside Of Defensive Equity Strategies