Stocks that shrug off the economy versus stocks that ride it
Defensive stocks belong to industries such as food, pharmaceuticals and utilities, where demand holds up even in a downturn. Cyclical stocks belong to industries such as autos, steel, chemicals and machinery, where results swing with the economy. Because their earnings move differently, their share prices also tend to behave differently at each stage of the cycle. Which industries fall on which side can change over time and from company to company.
In a recession, car sales can fall 20% while drug sales stay level with the year before.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.