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TheStreet Open House

5 Defensive Stocks to Protect Your Portfolio Gains - views

BALTIMORE ( Stockpickr) -- There's an important message in the all-time market highs that the S&P 500 and the Dow hit last week: If you don't own some defensive names right now, you should.

Going defensive makes sense right now for a couple of reasons. For starters, going defensive in the face of new all-time highs helps limit downside risks in this market. And perhaps more importantly, quality names have been some of the highest performers over the course of this "hated" stock rally. That means that, in this case, a good defense could actually be the best offense in 2013.

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And as we approach the summer, a stretch that generally comes with the year's worst market performance, it makes sense to use a safer strategy that doesn't completely wipe out your exposure to stocks in the middle of a broad-based rally. Going defensive accomplishes that.

That's why we're taking a closer look at five stocks with the best defensive posture right now.

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There's a quantitative basis for picking these five stocks: over the last five years, this group of stocks has been in the top quartile for maximum drawdowns and boasts consistently higher volatility to the upside than to the downside. That combination means that these names statistically offered up the best upside when times are good and the least downside when times got tough. And times have certainly gotten tough over the course of this data since it includes the crash in 2008.

Without further ado, here's a look at five defensive names you should own this summer.

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