Defense for Your Portfolio

The macroeconomic picture is certainly debatable lately, with various bullish/bearish opinions coming from anywhere and everywhere, all sides seeming equally plausible to one degree or other. Amid such an ambiguous backdrop, investors are bound to see the baleful Wall Street tradition of profit-warning issuances rear its ugly, Grendel-like head. Rite Aid (NYSE: RAD  ) has tempered its guidance. Coca-Cola Enterprises (NYSE: CCE  ) has also revised its expected results in a downward trajectory. And even Abercrombie & Fitch (NYSE: ANF  ) has discovered that it's difficult to remain hip during times of tenuous consumer confidence.

There are always companies, even in dubious market conditions, that don't find the need to alter their projected earnings take. Just when the sky seems it is about to fall and crush the terra firma below it, a sturdy entity such as Procter & Gamble (NYSE: PG  ) comes along to bring faith back to the individual investor.

P&G issued a release stating that its next quarterly report is going to be just fine. The company remains a believer in its ability to deliver double-digit earnings growth for its fiscal first quarter compared with the same time frame one year ago. Shareholders are looking at an EPS value of approximately $0.72, which would represent a 14% improvement. How sunny delightful is that?

This is precisely why investors should own a big consumer giant or two in a well-diversified portfolio; such confident guidance represents the best definition of "defensive stock" to me. There's no guarantee, of course, that P&G won't be whacked in a severe equities downdraft brought on by a sudden true bear posture, but holding such a stock during times of questionable market direction makes sense and tends to bolster an investment program.

Several cliches can be trotted out to support this kind of defense for your portfolio, such as "blue-chip dividend payers fare better when the grizzlies are out of hibernation" and "people still need to buy toothpaste and laundry detergent" -- pick your favorite. There is merit to these aphorisms, and I think individuals who are in love with stocks such as Amazon.com (Nasdaq: AMZN  ) and Yahoo! (Nasdaq: YHOO  ) should keep in mind that the search for all-out growth tied to newer-economy concerns needs to be balanced with established, older-economy instruments even if they tend to be less exciting in nature.

The following Takes feature other P&G topics:

• P&G Is No Gamble
• P&G Patches Up Sex Life?
• Procter & Gamble's Rising Tide

Fool contributor Steven Mallas owns none of the companies mentioned.