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Meaning / Definition of

Defensive Buy

Categories: Strategies, Investing and Trading,

An investment strategy wherein an investor buys stocks that are low risk and can be expected to perform well even during economic downturns. Defensive buys are usually stocks of companies engaged in utilities, food, health and essential household items. The purchase of defensive stocks creates a conservative portfolio that provides an above average return during recession but yields less than average returns in periods of economic expansion.

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