BALTIMORE ( Stockpickr) -- The S&P 500 has had a blockbuster year so far in 2013. At last count, shares of the big index have rocketed 23% higher since the start of the calendar year. So if you're not thinking defensively right now, you could be in for a rude awakening.
In football, the saying goes: The best defense is a good offense. That might be good advice for Super Bowl contenders, but it's terrible advice for investors.
As an investor, the best defense is a, well, good defense. And the best offense is a good defense too.That's not just some investing platitude. It's backed up by stock market research. According to data collected by Cambria Investment Management CIO Mebane Faber, missing the best and worst days of the year with a defensive market posture actually outperforms a buy-and-hold approach. So today, we're going defensive with five "sin stocks." >>Do You Own These Blue-Chips? Sell Them! Don't let the name fool you; sin stock companies aren't in the business of burning down old folks' homes. Instead, alcohol, tobacco, gambling, and weapons firms are all classical examples of sin stocks. So what makes sin stocks so attractive when anxiety ratchets higher? For starters, sin stocks tend to be businesses that provide a stress outlet for consumers. As a result, recession resistant revenues and sticky customer bases are the norm. The devil's in the details with sin stocks; because these firms generally sport wide economic moats and deeper margins than traditional consumer plays, sin stocks benefit from an extra qualitative boost that you can't find in any other group right now. That's not to say that sin stocks are recession-proof -- they're not. But they are certainly recession- resistant, which is more than an offense-centered investment strategy can offer. >>5 Dogs of the Dow to Stomp the Market Here's a look at five sin stocks that could outperform in this market.
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