How can I invest in defensive stocks?

How can I invest in defensive stocks?

Investing in defensive stocks involves selecting companies that provide stable earnings regardless of the economic cycle. These are typically in sectors like utilities, healthcare, and consumer staples.

What are some examples of defensive stocks?

Some well-known defensive stocks include Procter & Gamble, Johnson & Johnson, and Coca-Cola. These companies tend to perform well even during economic downturns.

How do I identify a good defensive stock?

Look for companies with strong balance sheets, consistent dividend payments, and a history of stable earnings. Analyzing their market position and competitive advantages can also help.

Are defensive stocks a good investment during a recession?

Yes, defensive stocks are often considered safer investments during recessions as they tend to maintain stable revenues and dividends.

What risks should I consider when investing in defensive stocks?

While defensive stocks are generally safer, they can still be affected by market conditions. Additionally, their growth potential may be lower compared to cyclical stocks.