During times of market uncertainty, investors often turn to defensive stocks as a strategy to protect their portfolios and mitigate potential risks. There are several reasons why defensive stocks become attractive in such situations.

Firstly, defensive stocks belong to industries that are considered less susceptible to economic downturns. These industries include utilities, consumer staples, healthcare, and certain parts of the technology sector. Companies in these sectors tend to provide essential goods and services that people need regardless of the state of the economy. Consequently, their revenues and profitability remain relatively stable during turbulent times.

Secondly, defensive stocks typically exhibit lower volatility compared to other stocks. They tend to be less affected by market fluctuations and have a history of demonstrating resilience during periods of economic uncertainty. This stability offers investors a sense of security and a potential hedge against market downturns.

Additionally, defensive stocks often pay dividends, making them attractive for income-seeking investors. Dividend payments provide a consistent cash flow, irrespective of market conditions, which can be particularly appealing during times of market uncertainty when capital gains may be uncertain.

Overall, by investing in defensive stocks, investors aim to reduce their exposure to market volatility, protect their capital, and potentially benefit from stable dividend income.