An investment decision to buy stock in a publicly-traded company that is resistant to market downturn. Examples of these companies include those in the pharmaceutical and budget retail industries. Defensive buys are relatively low risk, low return stocks, and investors often enter long positions in them if they anticipate a market downturn.
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A low-risk investment acquired for its resistance to major declines in market value. For example, an investor expecting a weak economic climate may buy stock in a pharmaceutical company or an electric utility.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.