What makes a stock "defensive"?

Defensive stocks are shares in companies that provide essential products or services that remain in demand regardless of economic conditions. Think utilities (electricity, water), consumer staples (food, toiletries), and healthcare. These companies typically maintain stable revenue and earnings even during recessions because people still need their products, making them less volatile than other stocks.

What is dividend yield and why does it matter?

Dividend yield is the annual dividend payment divided by the stock's current price, expressed as a percentage. For example, a $100 stock paying $3 in annual dividends has a yield of 3%. It matters because it shows how much income you'll receive relative to your investment. Many stocks in this portfolio offer attractive dividend yields, providing regular income regardless of stock price movements.

What is market volatility and how do these stocks help?

Market volatility refers to the rate at which stock prices rise and fall. High volatility means large, rapid price swings that can be stressful for investors. The stocks in this portfolio typically experience less dramatic price movements because their business models are stable and predictable. They act as a buffer during market turbulence, potentially protecting your overall portfolio value when other investments may be declining sharply.

What are blue-chip companies?

Blue-chip companies are large, well-established, financially sound corporations with excellent reputations. They typically have stable earnings, strong balance sheets, and histories of reliable dividend payments. Examples in this portfolio include Johnson & Johnson (JNJ), Procter & Gamble (PG), and Coca-Cola (KO). These companies have demonstrated their ability to withstand economic downturns and tend to be considered safer, less volatile investments.

How do dividend payment dates work?

Dividend payment dates are the specific days when a company distributes dividend payments to eligible shareholders. To receive a dividend, you must own the stock before its "ex-dividend date." The payment date typically occurs a few weeks after the ex-dividend date. Companies in this portfolio often pay dividends quarterly (four times per year), creating a potential stream of regular income for shareholders.

15 handpicked stocks

Sleep Well At Night Portfolio

A collection of premium defensive stocks expertly selected by our analysts to help protect your investments during market turbulence. These industry giants offer stability through consistent earnings, reliable dividends, and proven resilience in any economic climate.

Han Tan | Market Analyst

Updated 2 days ago | Published at जून 18