5 High-Yield Defensive Stocks That Can Thrive in the 2016 Market Panic

Did the bull market just get seriously interrupted? Or did it actually end? That is what investors are wondering about 2016. The Dow fell by 2.2% in 2015, and that was an interruption to what was nearing a seven-year bull market. But this drop of more than 1,000 Dow points in the first week marked the worst ever start to a year, a loss of about 6.2%. So now what are investors supposed to do?

If you want to own stocks no matter what, ones with serious long-term prospects and dividends, the class of defensive stocks is where investors will want to hide out. Maybe some of those big bull market stocks need to be lightened up in portfolios, and maybe the Dow and S&P will keep falling. After all, the Federal Reserve wants to keep raising rates gradually in 2016, and the situation in China and the world’s growth markets just isn’t getting better. Some strategists even think 2016 will be a down or very choppy year for stocks.

If investors want to stay in the stock market, the most defensive classes of stocks come to mind. This review does not include electric utilities or basic consumer products giants, but it does include food, water, phones, tobacco and defensive retail. All these stocks were hardly down against the real carnage in the first week, and some even rose!

One last consideration on the dividend front is how these compare to the longer-term Treasury notes and bonds. The 10-year Treasury yield is about 2.1% and the 30-year yield is about 2.9%, for a blended average of about 2.5%. That yield is surpassed by almost all five of these defensive stocks selected, and the average yield of these stocks is a whopping 3.6%.

Maybe you don’t want to trust analysts or outside views. During questionable times that is normal. But what can be trusted is the tape. These defensive dividend payers already have proven that they may hold their own weight. Here are five top defensive high-yield dividend stocks that are already proving to withstand the market carnage for 2016.

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