Capital preservation is a strategy used in investment management to protect an investor’s principal or initial investment. The primary objective of this strategy is to avoid losses in the value of the investment, even if it means sacrificing potential gains.
Capital preservation is often favored by investors who are risk-averse, such as retirees or those nearing retirement age, as they prioritize the protection of their savings over higher returns. This strategy is often achieved through low-risk investments, such as bonds, money market funds, or savings accounts, that offer a high degree of stability and a low level of risk.
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