Defensive View

For his part, Zidle of Richard Bernstein Advisors believes investors will increasingly seek safe-haven securities to insulate their portfolios against economic and political uncertainty, giving defensive stocks a shot in the arm.

Among them: utilities, telecommunications, health care and consumer staples. These equities tend to perform well when the economy falters because demand for goods and services that those companies provide remains constant. Consumer staples include companies that make food, beverage and household products.

“Over the next couple of months, people are going to be waking up to the headline risks in the U.S. , including the presidential elections and the fiscal cliff” that could shock the economy if Congress fails to act on a host of budgetary provisions, which are set to expire or take effect on Dec. 31, says Zidle.

“Investors are going to be afraid so the stocks that set the agenda are going to be from the defensive side of the economy,” he adds, noting much of that sentiment is unfolding as the domestic economy continues to show signs of relative strength.

Cyclical View

Wren, on the other hand, believes cyclicals will pull ahead as 2012 draws to a close.

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