Defensive Sectors

Defensive sectors mean parts of the market that tend to be more stable during economic weakness. In simple terms, defensive sectors sell goods or services people still need even when the economy slows. Defensive sectors are important because investors may move into them when they become worried about recession or market volatility. Common defensive sectors include utilities, healthcare, and consumer staples. For example, people still need electricity, medicine, and basic household products even during a downturn. Defensive sectors are not guaranteed to rise in a weak market. They may simply fall less than more economically sensitive sectors.