Defensive Stocks

Defensive stocks are shares in companies that tend to provide stable earnings and dividends regardless of the overall market conditions. These companies produce essential goods and services, such as utilities, healthcare, and consumer staples, which remain in demand even during economic downturns. As a result, defensive stocks are less volatile than growth stocks and often appeal to investors looking for stability and consistent income in uncertain market conditions. However, while defensive stocks provide stability, they generally offer lower long-term growth potential compared to more aggressive investments in sectors like technology or consumer discretionary.

Example

Procter & Gamble, a major producer of consumer goods, is a well-known defensive stock that tends to perform well even in times of economic hardship.