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While I don’t believe we are headed for a market crash, there’s no reason for investors to consider less risky stocks in their portfolios. I consider safe or defensive stocks to be less risky due to a number of features. The first is beta. According to Investopedia, beta is a measure of the volatility of a security or portfolio compared to the market as a whole.
So, if a stock has a beta of 1, it has the same volatility as the market. That’s why I only want to consider stocks with a beta below 1. In addition, I also want companies that have a consistent history of positive earnings growth and a Buy rating in our POWR Ratings system. Three stocks that fit the bill are Colgate-Palmolive Company (CL), Quest Diagnostics Incorporated (DGX), and W.W. Grainger, Inc. (GWW).
