defensive stock

Definition

A stock that tends to remain stable under difficult economic conditions. Defensive stocks include food, tobacco, oil, and utilities. These stocks hold up in hard times because demand does not decrease as dramatically as it may in other sectors. Defensive stocks tend to lag behind the rest of the market during economic expansion because demand does not increase as dramatically in an upswing.

Use defensive stock in a sentence

They bought some defensive stock for themselves and that made everyone happy within the business because they all wanted it badly.

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Phillip Morris International is a great pick for a defensive stock, because it will help to balance out some of the riskier stocks in one's portfolio.

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In the case of a zombie apocalypse, a portfolio heavy in defensive stock will hold up far better than any other sector of the economy, so you can count on those tobacco and utilities holdings to pay off in the long run.

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