Defensive stocks
Defensive stocks are those that don’t tend to depend heavily on what’s going on in the wider economy for their growth.
Defensive stocks are companies that don't tend to depend heavily on what's going on in the wider economy for their growth (cf cyclical stocks). They are usually found in industries whose products are needed, come rain or shine, such as food retailers or water companies. Products such as tobacco or alcohol that are based on habit (or addiction) also tend to see fairly stable demand, and the companies that make them are seen as defensive as well.
A balanced portfolio should contain a mixture of cyclical and defensive stocks which can be altered as the economic climate changes.
See Tim Bennett's video tutorial: What are defensive stocks?
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Is the stock market open on Christmas?
‘Tis the season for stuffing stocks – here’s what investors need to know if the UK stock market is open for trading on Christmas
By Oojal Dhanjal Published
-
Annual UK rent jumps £3,240 since Covid, says Zoopla
Zoopla finds rental costs have risen 27% since 2021, with rental costs far outstripping wages over that period
By Chris Newlands Published