While strong earnings reports boosted the stock market last week, geopolitical tensions, the Fed's decision to hike interest rates in 2022, and rising inflation should keep the benchmark stock indexes under pressure in the near term. According to a Bankrate survey, most analysts predicted a market correction within the first six months of 2022.
Amid the market's ongoing uncertainty, it could be prudent to hedge one's portfolio by investing in shares of dividend-paying defensive companies. Because of solid business models, these stocks tend to hold up better when the economy slows, and therefore safer. These safer stocks can even outperform other industries in times of market downturn.
