Defense is Offense on Wallstrip

Excuse the fancy title. I am very tired – unlike the defense stocks.

This trend seems like the absolute no brainer in hindsight (especially since the breakout of the Iraq war), but who is to say the trend can’t continue? I have written about the trend in the past and exposure to the industry is a smart idea for any long-term portfolio. We are a nation fascinated with death and destruction just like our ancestors. There is no reason to believe that future generations won’t behave the same way.

If you want to own defense in a more diversified and defensive way, I would recommend an ETF like Powershares Aerospace and defense (PPA) .

Judging from the lifetime charts of Boeing (BA), Lockheed Martin (LMT), General Dynamics (GD) and Norththrop Grumman (NOC) , the industry has always been a great long-term investment and even better if you enter during 15-20 percent declines.

How would I invest new dollars today?. There is no reason to sell if you are long, use the ETF to invest if you want to own them now and consider a basket of the best long-term performers in an industry decline (also PPA).

Brian takes a deeper look at the shorter term price picture.

Not a complicated industry as a whole considering human nature.

Disclosure – Long GD, LMT

PS – Our friend ‘Fly‘ has blogged that April is the big month for defense contracts. Mark that in your trading diaries for next year.