defensive securities

  

Definition

Stocks (called defensive stocks) and bonds that do not lose as much value as other securities when the stockmarket is in decline. These securities are issued usually by firms less affected by economic cycles (such as healthcare and utility firms). In times of economic downturn or financial market instability, investors tend to switch over to defensive securities because of their stable returns. However, defensive securities generally do not gain value as fast as others in times of a boom.

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