Definition
A defensive stock is a type of stock that tends to remain stable even during market ups and downs. These companies usually provide essential goods or services, so their demand stays consistent.
Example
Companies in sectors like food, healthcare, and utilities are considered defensive stocks. People will still buy medicines or basic food items even during an economic slowdown, so these stocks are less affected.
Caution
Defensive stocks are generally safer, but they may not give very high returns during strong market growth. Investors should balance them with other types of investments based on their goals.