An individual is considering making some changes in her portfolio due to expectations that the economy may be moving into a recessionary period. In what type of stocks should she consider investing?

The correct answer is Defensive stock.

Explanation:

What is a defensive action? This is a simple question that used to have a simple answer. In the past, defensive actions were reliable, conservative and unattractive investments in the sectors of basic necessities, basic services and health care. These companies generated stable cash flows, paid good dividends and in their names there was no "dot-com." However, more recently, there is a noticeable change in investors' opinions about what constitutes a defensive action.

Many companies that were previously considered defensive, such as food, tobacco and telecommunications companies, have been affected by technological advances, changing consumer behavior and fierce competition in a global economy.

In their search for defensive actions as an advance of the next recession, investors can conclude that a broader definition would do more justice to the current reality.

"A defensive action is one in which the income of a company has the potential to withstand a recession quite well," explains manager Alan Wilson.