Smart Stocks That Are Doing Their Jobhttp://www.fool.com/retirement/general/2011/08/09/smart-stocks-that-are-doing-their-job.aspx Dan Caplinger
August 9, 2011
Some stocks do better during downturns than others. Investors depend on these stocks to protect them from the full damage of market crashes. So in light of yesterday's 635-point decline for the Dow, it's a reasonable time to ask a simple question: Are the stocks that investors believe can defend your portfolio from bad markets getting the job done?
What's behind defensive stocks
On the other hand, dull, boring stocks with minimal growth prospects and stable businesses don't have much flash during bull markets. But when the economy slows, they have what it takes to get through the tough times with less of an impact on their business -- and therefore their stock price -- than those flashier high-growth investments.
Some of the industries that investors tend to see as defensive include health-care stocks and consumer staples. The reason is simple: When the economy is bad, people may be able to put off big-ticket consumer items, and industrial activity may slow down enough to hurt cyclical industries. But everyone still needs the medical care and basic products they use every day, and so the companies that sell them have a built-in buffer against a slowing economy.
So, are they working?
Health-care stocks, on the other hand, didn't do quite as well as some would have hoped. Both Pfizer (NYSE: PFE