I will pass over methods using instruments such as options, which I find not only too complicated but also too risky. The aim is rather to select assets that react as independently as possible from the market.
It has already been said that growing dividends inherently possess some of this characteristic. In particular, among these securities, those from non-durable and non-cyclical consumer goods are those which offer the best protection against market fluctuations.
The sectors of choice are therefore in food, cosmetics, pharmaceuticals and real estate, i.e. areas whose demand is less impacted by economic cycles. There are also sectors which even tend to benefit from periods of crisis, such as tobacco and alcohol...
By focusing on these sectors, we are able to free ourselves from economic and financial risks and we are able to considerably reduce the impact of a market decline. But as already said, these are still stocks, and the risk of a decline, even partial, remains.
It is therefore difficult to ensure positive profitability in all weathers. It is therefore necessary to turn to other approaches which have more to do with the types of assets sectioned, rather than the choice of stocks which make up the portfolio.
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For my part, I have reduced or even liquidated certain rather speculative positions, generously valued and with low dividends in recent weeks, such as Vifor, Komax and Tecan.
In return, I bought stocks with higher dividends and which are more like pseudo-bonds. These do not promise me huge gains, but they do provide me with a stable and high passive income as well as a beta lower than that of the market. These include Swisscom, BCV, Investis, Intershop, Cembra and APG.
I am also monitoring Helvetia, Goldbach, Walter Meier and Swiss Re, which I hope to be able to buy at lower prices soon.
I also took a bit of Swisscom. And in the insurance category I went with Swisslife and Allianz.
Hello Jerome,
If you find the options too complicated, it's because you've never had the opportunity to read a clear and concise book. This is now possible thanks to my book "Understanding Options" which has excellent reviews on Amazon 😉
And after reading, you still don't see clearly enough, you are entitled to one hour of training by Skype with the purchase of the new book.
On the other hand, you are making a big mistake regarding options. Probably due to lack of knowledge of the product. Trading options is not only more profitable, but less volatile than investing in an index. I demonstrated this in this article: http://www.celtinvest.com/vendre-des-options-dangereux
Real estate is a very cyclical sector.
We regularly talk about real estate bubbles in which most crises arise.
The financial crisis is first and foremost the subprime crisis, subprime refers to mortgage loans granted to people unable to meet the deadlines, the working classes.
And real estate bubbles have burst not only in the United States, but also in Ireland, England, the Netherlands and Spain.
I will come back to real estate in more detail later. Indeed, it is not without risks either. On the other hand, it allows for interesting diversification in a portfolio.