Defensive security

Defensive Securities

Low-risk securities, especially stocks in companies relatively unaffected by business cycles. In times of market downturn, investors tend to seek defensive securities to provide a steady rate of return, or at least to lose less money than the market as a whole. Examples include stocks in utility companies and the health care industry.

Defensive security.

Defensive securities tend to remain more stable in value than the overall market, especially when prices in general are falling.

Defensive securities include stocks in companies whose products or services are always in demand and are not as price-sensitive to changes in the economy as other stocks. Some defensive securities could be stock in food, pharmaceuticals, and utilities companies.

Defensive securities are also known as countercyclicals.