The market has crashed, a recession is looming, and I’m adding defensive stocks to my ISA

first_imgThe market has crashed, a recession is looming, and I’m adding defensive stocks to my ISA Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. See all posts by James J. McCombie James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended AstraZeneca and Halma. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. “This Stock Could Be Like Buying Amazon in 1997” James J. McCombie | Sunday, 5th April, 2020 | More on: AZN GSK HLMA I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.center_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Enter Your Email Address Image source: Getty Images A recession in the UK looks likely. Due to the measures needed to contain the coronavirus outbreak, economic activity is dramatically lower than normal. Many jobs have been lost, perhaps permanently, as businesses go bust, making a recovery more difficult. The stock market has already crashed, and with a recession in mind, many investors may be looking to add defensive stocks to their Stocks and Shares ISAs.Adding defensive stocks in the face of a recession is a prudent move. However, the companies selected should also make sense in the long term, when the economy will be in better shape.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…What are defensive stocksIf a company sells good and services that consumers can’t or won’t cut back on, no matter the state of the economy, then it is likely to be a defensive stock. Companies whose operations are stable over time, that generate plenty of cash, and have strong balance sheets are what to look out for.These types of companies tend to be more mature and have larger market capitalisations. They also tend to pay dividends, even when the economy is weak and interest rates are low, and thus boost investor returns.Investors may be familiar with the concept of beta. Beta is a measure of how much an individual share price moves with the market. A beta of 1 means the share moves as the market moves. Defensive stocks tend to have betas of less than 1, meaning they fall less than the market when it declines.Investors may pile into defensive stocks when the market is crashing, only to see it turnaround and be left behind. If defensive stocks have betas of less than 1, then they rise slower than the overall market does. But, long-term investors should not be looking to time the market. What they should be interested in is adding great companies to their portfolios. If those great companies also happen to be defensive, then all the better.Where to lookUtilities are good examples of defensive stocks. Whatever the state of the economy,  people will need electricity, gas, and water. Shares in pharmaceutical companies and medical device manufactures are good defensive bets because people do not stop getting sick in recessions. Consumer staples companies, like food and beverage producers, also fall into the defensive stock category.The FTSE 100 contains the largest UK companies and is a good place to begin a defensive stock search. GlaxoSmithKline and AstraZeneca are two pharmaceutical giants paying dividends that are covered well by earnings, suggesting investors will continue to enjoy yields over 3.5%.I like the look of Halma. This FTSE 100 company markets life-saving technology solutions for industry and healthcare settings. In a statement on 18 March, the company reported that so far the COVID-19 outbreak had had minimal impact on its operations. Halma generates plenty of cash, and its dividend is covered twice by earnings. Holding at least a few defensive stocks in a portfolio can help smooth out its return during a recession. But make sure any picks make sense in the long- as well as the short-term. Trying to time the market is difficult. Adding defensive stocks now, only to move out of them when things seem to be picking up is not something I would encourage. Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this.last_img read more