The S&P 500 has faced a decline in momentum this year after a strong three-year run, primarily due to concerns over potential underperformance in the AI market, economic uncertainty, and geopolitical tensions, particularly the war in Iran. In light of these challenges, investors are encouraged to consider defensive stocks that historically perform well in turbulent conditions.
Two standout candidates are Abbott Laboratories (ABT) and Intuitive Surgical (ISRG). Abbott, a diversified healthcare company, benefits from its varied business units, which help mitigate risks during downturns. Its status as a Dividend King, with over 50 consecutive years of dividend increases, further enhances its appeal as a stable income source. Meanwhile, Intuitive Surgical, the leader in robotic surgery, boasts a strong competitive moat, as hospitals are likely to continue using its Da Vinci systems due to high initial costs and a recurring revenue model from associated products.
For market professionals, incorporating these defensive stocks could provide a buffer against ongoing volatility, ensuring consistent performance and income generation in uncertain times.
Source: fool.com