5 Defensive Funds to Guard Your Nest Egg

Don't dive straight into cash — protect yourself while adding value

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ETFstock185 5 Defensive Funds to Guard Your Nest EggThe major indices continued hitting new highs this week on the back of renewed rhetoric and commitment from Federal Reserve Chairman Ben Bernanke, but the rally in stocks is starting to make many investors wonder when the music will ultimately stop … and who is going to be left without a chair to sit down on.

The real winners in 2013 have been go-go stocks like Tesla Motors (TSLA) and iRobot Corp (IRBT), which have posted impressive triple-digit returns. These offensive powerhouses have reached stratospheric heights, but if you are worried about protecting your gains, then it might be time to switch to stocks or funds that play defense. Protecting your hard-earned profits will allow you to put money back to work in stocks at better valuations once some of this overbought momentum has been worked off.

Your first stop on the road to portfolio protection will likely be cash, which is a good short-term holding area from which to survey the investment landscape. However, stable value is really the only benefit to staying in a money market fund. If you want to continue to move the needle forward on your portfolio even in turbulent times, then you need some quality holdings that will continue to add value.

The following article outlines five funds that might be useful tools for your portfolio in the event that stocks really have reached their peak:


Article printed from InvestorPlace Media, http://investorplace.com/2013/07/5-defensive-funds-to-guard-your-nest-egg/.

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