The Compound and Friends Why Defensive Stocks Have Disappeared
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Jun 20, 2025 
Matt Cerminaro, co-founder of Exhibit A, and Todd Sohn, ETF strategist at Strategas, dive into the nuances of today's market landscape. They tackle the Fed's challenges with inflation and employment, explore the decline of defensive stocks, and discuss the evolving role of technology in investing. The duo sheds light on innovations like leveraged ETFs, the significant role of Apple in the S&P 500, and the psychological factors influencing market recoveries. Their insights invite listeners to rethink traditional investment strategies amidst shifting dynamics.
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Market Recovery Timing Insight
- After a 20% market drop, historical data shows it takes 3.6 months on average to make new all-time highs from within 5% of previous highs.
- Overhead supply and behavioral factors create a lid on immediate new highs after big drawdowns.
Adapt Defense Investing Approach
- Recognize that traditional defensive sectors now represent the smallest market share in decades.
- Consider investing thematically or focusing on industries rather than relying on classic defense sectors.
Rethink Defensive Stock Strategy
- Understand what you own when buying the S&P 500 since tech and growth stocks dominate.
- Think differently about playing defense; traditional defensive stocks don't work as before.