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Defensive Stocks, Definition and Types of Investment

Defensive stock is one type of investment that is quite popular today. As a potential investor, you need to know the right type of investment.

Stocks are one of the instruments that are quite popular and in demand by millennial youth.

Without realizing it, stocks also have different types. One of them is defensive stock.

Once you know the right type of investment, deciding to run it is much easier. Adjust the type of investment in the conditions that occur.

For example, defensive stocks that are suitable during a pandemic. This stock is able to provide an important role by providing stable profits.

Even when the economy is bad though. This investment has an effect on an asset in the market.

For more clarity, you should read the full review.

Also Read: Stock Valuation Method is Important for Determining Investment

What are Defensive Stocks?

As an investor, of course, you must know what exactly the investment is being carried out.

It’s good if the investment you choose is quite right. This is because the purpose of investment activities is to obtain the maximum profit.

Not only that, looking for stable profits in the long term can be done by choosing the right instrument. Defensive stock is an investment instrument that offers many long-term benefits.

This stock refers to companies whose profits are not affected by the business cycle. Including the condition of an economy.

Even when conditions are bad, the reduced profit is only a small amount compared to other types of investment. This type of stock is to distribute dividends in a stable amount.

This is despite the economic problems and overall stock market conditions. This is due to the constant demand for these products.

In this case it helps stocks are more likely to be stable in various business cycles that occur. For novice investors, choosing defensive stocks is the best recommendation.

Also Read: Number of Shares in 1 Lot, Know Before Investment

Defensive Stock Type

In addition to the many investment instruments and various types of stocks, defensive stock also offers various products to its consumers. There are several types of shares that are included in it, namely:

Health Products and Services

The type of defensive stock is health products and services. These products and services will continue to be sought after by all people in any condition.

The health product groups include insurance, pharmaceuticals, hospitals, and medical devices.

Basic needs

As for the next type of defensive stock, namely basic needs.

Products that are included in basic needs are all goods that people tend to buy to meet their needs and regardless of economic conditions.

Basic needs products include household goods, beverages, food, tobacco, and hygiene products.

By having products of basic needs, a company will generate stable income even though the economy is strong or weak.

Also Read: Advantages of Stockbit Stocks Not Available in Other Securities

Telecommunication

The next defensive stock came from telecommunications companies. Until now people still need communication services.

Internet access is an important requirement for carrying out various activities. Running defensive stocks helps investors avoid big losses. (R10/HR-Online)

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