What are the differences between defensive stocks and growth stocks?

What are the differences between defensive stocks and growth stocks?

Defensive stocks are shares in companies that provide consistent dividends and stable earnings regardless of the economy. Growth stocks, on the other hand, are shares in companies expected to grow at an above-average rate compared to their industry or the overall market.

Can you give me some examples of each type?

Sure! Examples of defensive stocks include utilities like Duke Energy and consumer staples like Procter & Gamble. For growth stocks, you might look at companies like Amazon or Tesla.

Which type of stock is better for long-term investment?

It depends on your investment goals. Defensive stocks are generally safer and provide steady income, while growth stocks can offer higher returns but come with more risk.

What should I consider when choosing between them?

Consider your risk tolerance, investment horizon, and whether you prefer income through dividends or capital appreciation.