Hi, From the answers for this question, would like to ask why is it expected to see a higher than average price fall for defensive shares with high dividend yields during a bear market? Thanks a lot in advance!
Hi - yes, this doesn't sit right with me either! So I think your understanding is fine. FWIW when we wrote the ASET solution for this question, we broke that paragraph down into two key points: Defensive stocks would typically be expected to perform relatively well in a bear market, so it would be a good idea to choose them. (They are still likely to drop in value, but not by as much as the rejected shares.) Could also choose shares with high dividend yields, since the dividend income might offset the capital losses from falling share prices.
