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Are the so-called “defensive stocks” as safe as people say?

By Andy Davis   October 2011

For all the volatility in equity markets over the summer, a few themes have held good—the gold price keeps rising, bank shares keep falling, and wherever you look, people keep saying: “Buy defensive equities.”

Gold is becoming a core retail investment option. For the first time in one regular survey, as many British retail investors (38 per cent) say they intend to buy gold as to buy dividend paying shares. The decline in bank shares is happening for two good reasons: developed economies are slowing and their banks hold a lot of government bonds that are worth less than had…

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