What are some defensive sectors during a downturn?

What are some defensive sectors during a downturn?

Defensive stocks are those that tend to provide stable earnings and consistent returns, even during an economic downturn. These investments are considered more recession-proof than their cyclical counterparts. Here are the main defensive sectors:

1. Utilities: Utility companies provide essential services such as electricity, water, and natural gas. Their demand remains relatively stable regardless of economic conditions. People continue to use utilities even during downturns, making utility stocks a defensive choice.

2. Consumer Staples: Companies in the consumer staples sector produce everyday necessities like food, beverages, household products, and personal care items. These products are essential, and demand for them tends to be consistent. Examples include companies that manufacture toiletries, cleaning supplies, and packaged foods.

3. Healthcare: Healthcare stocks belong to a defensive sector because people require medical services and pharmaceuticals regardless of economic cycles. Companies in this sector include pharmaceutical manufacturers, healthcare providers, and biotechnology firms.

Investors often turn to these defensive sectors to diversify their portfolios and mitigate risk during market downturns. By including defensive stocks, you can help protect your investments when other sectors experience volatility