These days, despite the machinations of quantitative easing and other manipulative market stimuli, good quality businesses can still be found with modest p/e ratios and the comparable allure of a high dividend yield. Among them are AstraZeneca (Altman Score of 4.6; p/e of 6; gross dividend yield of 7 per cent) and Royal Dutch Shell (Altman Score of 3.3; p/e of 7; gross dividend yield of 5 per cent). To put those dividend yields into perspective, ten-year UK gilts yield 2 per cent and offer no protection whatsoever against the prospect of sustained inflation. You be the judge.

A less scientific but equally valid approach would simply be to favour those sectors of the market that have a reputation for solidly stodgy earnings and generally defensive attributes. Such sectors would include tobacco, utilities, healthcare, and consumer staples. Fund managers have a metric for safety in this respect too - what they term beta, which is simply the historic pricevolatility of a stock relative to that of the broader market. A stock with a beta of 1 can be expected to move hand in hand with the most relevant market index. A stock with a beta well below 1 can be expected to fall much less than the market when the market falls. British American Tobacco, for example, has a beta of just 0.6; Barclays, on the other hand, has a beta of 1.8. You have been warned.

David Fuller, market strategist at the excellent Fullermoney.com investment website, offers another way to assess interesting stocks. He calls the most promising ones 'the autonomies': multinational companies that operate globally and can be considered stateless, ideally with many of the attributes above (low p/e ratios, for example, and high dividend yields) and with quasi-monopoly status in their individual sectors. Many of these so-called autonomies are US-based but international in scope: think Microsoft, Johnson & Johnson, McDonald's. The one wrinkle in this argument is that cash-strapped governments, when they need money, will go after those entities that have it. The autonomies represent a highly visible tax target for depleted treasuries.

There are other useful portfolio diversifiers worthy of consideration for any investor concerned about the state-sanctioned inflationism that stalks the western world. Gold and silver, the monetary metals, represent one of the best forms of currency protection at a time when the printing presses are running 24 hours a day. But for the nervous investor, a portfolio of high quality defensive stocks represents a practical way of being in the market without being entirely at the mercy of the market.

Despite the best efforts of smooth-talking 'strategists' to persuade us otherwise, the business of investing is not an exact science. Unanticipated risks lurk around every corner. But many of those risks are in plain sight: bankrupt governments; debt defaults; crippled banks; the likelihood of soft economic growth for some time to come in the west, combined with varyingly intense attempts at national austerity. If that doesn't argue in favour of defensive investing, I don't know what does.

Tim Price is Director of Investment at PFP Wealth Management.

David Fuller's view Tim Price is right to point out "that cash-strapped governments, when they need money, will go after those entities that have it", or at least they will try to. The most vulnerable of those entities are we the people, and most of us have experienced tax hikes in recent years and more are likely to be in the pipeline. This is all the more reason to remain invested in high-yielding multinational companies with strong balance sheets and good earnings cash flow.

The Autonomies have an advantage among corporations because they are like mobile principalities, - only they own successful brands, products, patents and have specialty skills - rather than land which can be taxed and even expropriated in extreme circumstances. A successful Autonomy, worthy of the name, pays local taxes but keeps its cash hoard away from desperate governments.