The Performance of Defensive Investments

Abstract

Defensive investments are defined here as those asset classes that have attracted funds during periods of stock market weakness. Some of these asset classes such as cash, gold, or government bonds benefit most when passive investments take a flight-to-quality. Others are more proactively employed by investors to take advantage of the cause of equity weakness. Taken together, these asset classes make up the category of defensive investments. How well they performed during specific periods of stock market weakness and in general over long investment horizons, is the subject of study of this article.