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Tactical Defense Is Best Strategy for Volatile Stock Market
CNBC.com | October 03, 2011 | 09:36 AM EDT

Tepper is putting his clients in these types of stocks to avoid the wild market swings that have become the norm. He favors names like pharmaceutical maker Bristol-Myers Squibb , Duke Energy, and tobacco giant Altria.

Altria is a recession-proof stock due to its powerful pricing power. While cigarette sales are on the decline in a health-conscious U.S., Altria has been able to increase prices at a faster rate than sales have dropped.

“Our clients don’t expect us to be the hero [in these type of markets], but they want to be able to sleep at night,’’ Tepper says.

Food stocks, a subset of the staples sector, are another area that tends to hold up through tough times.

You can directly target food stocks through PowerShares Dynamic Food & Beverage ETF, which owns food, agriculture, and grocery companies. The ETF has held up better than the overall market year-to-date through Sept. 23, losing just over 2 percent versus a loss of 10 percent for the S&P 500.

For more general consumer staples exposure, advisors suggest the Consumer Staples Select Sector SPDR ETF.

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