Sector: The investors should avoid sectors that are risky in nature, like those too dependent on the occurrence / non-occurrence of an event (commodities due to effect of China slowdown) or one that relies heavily on government policies (energy).

Sales: Investors need to select companies of adequate size (in sales and cash flow terms). A large balance sheet and a high market share helps a company to tide over the excessive volatilities of the industrial cycle.

Current ratio: This indicates financial security and the ability to meet short-term cash requirements. Defensive investors should generally select companies that have current assets double its current liabilities.

Long term EPS growth: This indicates financial sustainability. Earnings growth should at least be greater than 15% (at par with the expected earnings growth in Sensex companies) and not negative in the past three to five years. A long-term sustainable earnings growth also indicates the management's ability to reward stakeholders.

P/E ratio: This is one of the most important criteria in these times. While valuations differ across industries, investors should generally look at a 2-year forward price to earnings multiple of around 15 times for a growth stock (industries like software and pharma) and a price to earnings multiple of 6 to 8 times for stocks from the industries that are more dependent on the overall economic growth of the country (like FMCG).

Remember, these rules are strictly for investors who are defensive in nature and generally place high emphasis on the safety of capital through avoiding serious mistakes while making investment decisions. Also, a defensive investor is one who aims at freedom from effort and the need for making frequent decisions.