There will be increased risk in equity markets in 2021, but defensive stocks offer good protection in these uncertain situations. Buying Microsoft, Costco Wholesale, and Brookfield Infrastructure Partners stock is good low-risk investment advice.
Forecasts for stock exchange investments indicate that 2021 could be a difficult year, despite the likely start of the economic recovery and the end of the health emergency due to the pandemic. Some established analysts even speak of a possible market crash, and in any case almost all predict an increase in risk. In such a situation, you need to be cautious and structure a balanced and defensive investment portfolio, or at least with a substantial portion of defensive stocks: Microsoft, Costco Wholesale, and Brookfield Infrastructure Partners are three shares to consider.
Defensive stocks to buy now: three ideas for investing while reducing risk
There are many stocks that fall into the defensive sector but at this time it is advisable to focus your attention on listed companies that offer a good level of security to invest in the long term: Costco Wholesale, Brookfield Infrastructure Partners and Microsoft have the right parameters. In this article, you will find more details on why and how to invest in defensive stocks.
Buy Costco Wholesale shares
Costco Wholesale is a large distributor that at the end of 2019 could count on 800 warehouses around the world, of which 550 in the United States. Thanks to this “fleet”, the company has enormous power over suppliers. Online channel development and huge membership base are the other strengths. Warren Buffett also invests in Costco Wholesale stocks, having held them for many years.
The price of Costco’s shares is around 360 euros (data updated on January 28): not very cheap, that’s for sure, and according to many analysts the price could strengthen in the coming months. According to Oppenheimer’s Rupesh Parikh, there are “high chances of superior performance fueled by the continued increase in market participation and a special dividend, which could come next year”.
Buy Microsoft shares
A tech stock with top-level defensive characteristics, buying Microsoft shares and keeping them in the portfolio is one of the most classic and useful investment advice. Over the past 5 years, the Microsoft-led public company has rewarded investors and traders very well with shares that jumped 356 percent.
Microsoft’s dividend, considering current prices on the stock exchange, yields 2.24 percent. In short, investing in Microsoft shares means playing it safe.
Buy Brookfield Infrastructure Partners shares
Brookfield Infrastructure Partners is another stock in the defensive sector to buy for long-term investing in the event of high market volatility, on the stock market it has grown by 50 percent over the past 5 years. The dividend also practically doubled. In 2020, the stock recorded a 7 percent progression. In short, a safe haven in times of high volatility.