In light of the recent minor setback on the Australian share market, investors are likely considering whether it's the best place for their money.
Although there's no way to avoid volatility altogether, some investors choose to buy companies which are 'defensive' in nature. They believe, no matter how hard the market crashes, the companies they buy, will survive.
Companies with exposure to healthcare, defence, telecommunications and infrastructure are generally considered defensive because they have strong competitive advantages and recurring revenue streams which are usually non-discretionary.
For investors approaching retirement, it's worthwhile considering what these stocks have to offer your share portfolio.
From the healthcare sector both ResMed Inc. (CHESS) (ASX: RMD) and Cochlear Limited (ASX: COH) could be considered defensive, although both have solid long-term growth prospects.
Each also pay a good dividend, equivalent to 2.1% and 3.2% respectively and trade at reasonable valuations giving the likelihood of increased earnings per share in the next five years.
Another blue-chip company with a wide economic moat is Computershare Limited (ASX: CPU). The share registry company has a presence in over 20 countries and will benefit from a falling Australian dollar.
Buy, hold, or sell?
Every portfolio should be formed around a number of 'core' long-term holdings which will help you sleep easy at night. At today's prices these three companies appear a worthy addition to long-term share portfolios.
