Minuk's Musings and Defense
Richard Minuk - Mar 24, 2023
I was hit with strep throat....
This week I was hit with strep throat. It wasn’t fun but luckily we live in a time and place where medicine is available for these types of ailments.
Tylenol, owned by Johnson & Johnson (J&J), helped me get through the week.
J&J’s stock is in the Healthcare sector which is considered to be defensive.
What do I mean “defensive”?
Defensive sector stocks include companies with products or services that tend to be (but aren’t always) consistently purchased regardless of overall market performance. This can lead, at times, to more stable investor returns during volatile market years.
There are 3 main defensive sectors: Utilities, Consumer Staples and Healthcare.
In 2022, defensive sectors in the US did their job protecting on the downside, averaging -2.7% while the S&P 500 was – 19.4%.
We’re still in a volatile market but so far this year, the trend has not continued.
| US Sectors | YTD | 2022 | 5year | 10year |
| Utilities | -7.7% | -1.4% | 5.4% | 5.3% |
| Healthcare | -6.8% | -3.6% | 9.7% | 10.9% |
| Consumer Staples | -2.5% | -3.2% | 7.4% | 6.3% |
| S&P 500 All | 2.7% | -19.4% | 8.8% | 9.8% |
| J&J stock (for fun) | -13.3% | 6.0% | 6.7% | 9.5% |
Factset March 24 2023
Canada, TSX Capped Composite
US, S&P 500
BMO Economics Team’s latest “In Focus” article is here - link
Richard
Richard Minuk, CFA | Investment Advisor