understanding financial jargon
Defensive shares are shares in companies which tend to perform reasonably well in all economic conditions. Defensive shares will often produce unspectacular but steady earnings regardless of the wider economy.
For example Utilities, tobacco firms and supermarkets are defensive shares which perform fairly consistently throughout all economic conditions, often because they operate in near monopolistic market where competition is limited and customers have little other choice but to buy their goods and services.
This is in contrast to cyclic stocks which are dependent on the wider economy for their health, or growth shares which may do well for the period when the company is operating in a growth sector, but which revert to cyclic behaviour once the reasons for growth have dissipated.
What to do if you need more help
If you need more help with your specific commercial loan, mortgage or insurance requirement please speak to a professional financial adviser.
We hope you found this information useful.
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