In the stock market, there are a variety of different types of stocks. One type to consider is known as defensive stocks. Defensive stocks can provide investors with a way to hedge against volatility in the stock market and reduce risk.
Investing in defensive stocks can offer several advantages for investors looking to mitigate risk while still earning returns from their portfolios. The most obvious benefit is that these securities tend to remain relatively stable over time. This comes even when other sectors experience swings in prices due to macroeconomic trends or specific industry events. This means that investors can rest assured knowing that their investments will not be significantly affected by short-term fluctuations in the market.
Additionally, many defensive stocks pay dividends. This can provide income for investors during periods when other sources of income may be lacking.
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