Financial Tips: Know What is Defensive Stocks in Share Market, Examples, And More

17 Dec, 2023 Author: Ayushee Joshi

Basic Business Terms: Defensive stocks are a type of investment that is known for its ability to withstand the face of market volatility and economic downturns. These stocks are less vulnerable to changes in consumer spending and economic cycles because they are part of industries that supply necessities. Defensive stocks, which are generally found in industries like utilities, healthcare, and consumer staples, draw investors looking for a steady income stream because they are stable and consistently pay out.

Defensive Stocks Examples

As defensive stocks frequently have lower beta values, which indicate less sensitivity to market movements, investors turn to them as a form of insurance against market uncertainties. Although consumers may reduce their spending on discretionary items during economic downturns, the demand for necessities like food and shelter remains mostly steady, which adds to the defensive character of these stocks. Defensive stocks include well-known firms like Procter & Gamble, Johnson & Johnson, Philip Morris International, and Coca-Cola. Defensive stocks are a popular choice among investors as a wise way to protect their wealth and ensure a consistent income stream, particularly when economic uncertainty is imminent.