Amid growing economic uncertainty, investors are flocking to defensive stocks, seeking stability and consistent returns. These stocks, typically found in sectors like utilities, consumer staples, and healthcare, are considered less sensitive to economic cycles.

Why Defensive Stocks?

Defensive stocks offer a haven during market volatility due to their essential nature. People still need electricity, food, and medicine regardless of the economic climate. This consistent demand translates to stable earnings and dividends, making these stocks attractive in uncertain times.

Key Characteristics of Defensive Stocks:

• Stable Earnings: Less susceptible to economic downturns.
• Consistent Dividends: Provide a steady income stream.
• Lower Volatility: Experience smaller price swings compared to growth stocks.

Sectors in Focus

Several sectors are considered defensive:

• Utilities: Companies providing essential services like electricity and water.
• Consumer Staples: Businesses selling everyday necessities like food and household products.
• Healthcare: Companies involved in pharmaceuticals, medical devices, and healthcare services.

Investment Strategy

Investors often incorporate defensive stocks into their portfolios as a risk management strategy. By allocating a portion of their investments to these stable assets, they aim to mitigate potential losses during market downturns and maintain a consistent income stream.