3 Defensive Plays to Potentially Beat the Market

Michael Albert submits: Admittedly, this has been a difficult market to remain bearish on. I've written quite a few pieces on SeekingAlpha highlighting near-term outperformance in defensive sectors, which generally lead in a period of high volatility for equities. The markets with hindsight were in the midst of mini-corrections in those instances, but the declines so far haven't lasted long enough to be noticeable by the media (or that painful for that matter).

By Eric Parnell:The recent performance of utilities has been remarkable. Since the beginning of the year alone, the sector has gained over +16% ranking it third just behind its defensive brethren in consumer staples (XLP) and health care (XLV).

Dr. Oliver Schwindler, CAIA submits: Last week I presented the concept of equally-weighted risk contribution (ERC) portfolios and showed that this risk-based indexation methodology can deliver alpha compared to classical benchmarks like the S&P 500. I want to give readers a quick update on the recent performance.

Michael Johnston submits:Recent weeks have highlighted the “new normal” in the investing world, as concerns of a debt crisis in Europe have rippled throughout the global economy. On Wall Street, developments in the streets of Athens and the German Bundestag have trumped more local economic indicators, as U.S. markets have taken their cues from across the pond in recent weeks.

By MyPlanIQ:U.S. stock market rose 0.87% for the week (Vanguard total stock market ETF VTI). S&P 500 is again sitting at around 1250 line (1255 to be exact). With markets swinging back and forth, it is important to look at the market internals.

Richard Shaw (QVM Group) submits: Based on current and recent price behavior, these U.S. sector ETFs are the better trend following choices among the 10 U.S. sectors (as of 2011-05-11):

Michael Albert submits: Over the past several weeks I've noted to readers of my articles that market internals continue to weaken despite what has otherwise been a strong start to the year. In my last piece, I took a look at how aggressive, beta-driven sectors are performing relative to the S&P 500 itself. The idea was to get a sense of which sectors are likely to show outperformance potential, and to get a gauge of market sentiment through sector strength or weakness.