What are defensive stocks and why are they called that?

Defensive stocks are companies that provide essential goods and services that people need regardless of economic conditions. They're called "defensive" because they help protect (or defend) your investment during market downturns. Think of companies that sell everyday necessities like food, household products, utilities, and healthcare. Since people still need these items even when the economy struggles, these businesses tend to have more stable sales and stock prices when markets get rocky.

What does "non-cyclical demand" mean?

Non-cyclical demand refers to products and services that people continue to buy regardless of economic conditions. Unlike luxury items or big purchases that consumers might delay during tough times (cyclical demand), non-cyclical goods like groceries, medications, and utilities are essential to daily life. This consistent demand creates more predictable revenue for companies, even during economic downturns, making their stocks generally more stable during market volatility.

What is "Mercury Retrograde" referring to in this context?

While "Mercury Retrograde" is an astronomical phenomenon where the planet Mercury appears to move backward, it's used here as a metaphor for market volatility or turbulence. Just as Mercury Retrograde is associated with communication disruptions and uncertainty, market volatility creates unpredictable price movements. This stock collection is designed to provide stability during such unstable periods—much like having a reliable plan when things seem to be moving in reverse or becoming chaotic.

What is a "consensus recommendation" for stocks?

A consensus recommendation represents the combined opinion of multiple Wall Street analysts about a particular stock. Analysts study companies and issue recommendations like "buy," "hold," or "sell" based on their research. The consensus takes all these individual opinions and averages them into a single rating, giving investors a quick snapshot of how professional analysts collectively view the stock's prospects. It's a helpful data point, though it should be just one of several factors in your investment decisions.

How do dividends work with these kinds of stocks?

Many defensive stocks in this collection pay dividends, which are regular cash payments to shareholders from the company's profits. For example, companies like Procter & Gamble (PG) and Johnson & Johnson (JNJ) have long histories of not just paying dividends but increasing them year after year. These payments occur regardless of the stock's current market price, providing a steady income stream even when markets are volatile. When you own dividend-paying stocks through Nemo, these payments are automatically deposited into your account, where they can be reinvested or withdrawn.

16 handpicked stocks

Mercury Retrograde

A collection of stable, essential businesses selected by financial experts to help protect your investments during market turbulence. These companies provide the goods and services people need every day, regardless of economic conditions.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 17