After the share market shocks of the past few days, the instinct among some investors will be to call for the tin hat and seek safety in classic defensive stocks. But this is a case when instinct could be plain wrong.
First, it may be that the worst is already over. After such an unusually smooth and exponential climb on Wall Street over the past year, it doesn’t automatically follow that this is a turning point. There are still plenty who argue that the so-called melt-up will resume shortly. Doing nothing is often the best policy in these circumstances.
Second, even if this is the beginning of a more prolonged and painful bear market, it doesn’t mean it will play by the normal rules. The