Have you ever wondered what makes an economy thrive? Is it the wealth of a nation, the number of businesses, or the strength of its workforce? In reality, an economy is a dynamic system shaped by countless factors, from the availability of resources to government policies and global trade dynamics.

Defensive equities serve as a reliable financial cushion, especially during periods of market volatility. These stocks belong to sectors that demonstrate resilience amidst economic fluctuations, shielding investors from severe downturns. Industries such as consumer staples and utilities exemplify this stability, with products and services enjoying consistent demand, thereby ensuring steady earnings for these stocks.

Cyclical and non-cyclical stocks represent varying degrees of correlation with the broader economy, influencing their price fluctuations. Cyclical stocks exhibit a direct relationship with economic conditions, while non-cyclical stocks tend to perform consistently regardless of economic growth rates.