How do economic cycles affect defensive stocks?
An example of an AI chatbot conversation about the impact of economic cycles on defensive stocks.
How do economic cycles affect defensive stocks?
Defensive stocks tend to perform better during economic downturns. They provide stable earnings and dividends.
Can you give examples of defensive stocks?
Sure! Examples include utilities, consumer staples, and healthcare companies like Procter & Gamble and Johnson & Johnson.
What happens to defensive stocks during a recession?
During a recession, defensive stocks usually hold their value better than cyclical stocks, as demand for their products remains steady.
Are there any risks associated with investing in defensive stocks?
Yes, while they are generally safer, defensive stocks can underperform during economic expansions compared to growth stocks.
How can I identify good defensive stocks to invest in?
Look for companies with strong balance sheets, consistent dividend payments, and a history of stable earnings.
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