Defensive stocks are shares of companies whose products and services remain in demand regardless of economic conditions. These companies typically operate in sectors like food, healthcare, utilities, and consumer goods.
Because people continue buying essentials like food, medicine, and electricity even during recessions, defensive stocks tend to maintain their value when the broader market declines. Examples include companies like Johnson & Johnson, Procter & Gamble, and utility providers.
Defensive stocks are favored by conservative investors seeking stability during uncertain times. While they may not offer the high returns of growth stocks during bull markets, they provide a safety net during downturns and often pay reliable dividends.