Definition
A strategy focused on protecting the value of your money rather than aiming for high returns. Often involves safer, lower-yield investments.
What to consider
- If safety is your priority, focus on preserving what you have.
- Consider low-risk investments that protect your principal.
- This approach is about steady growth rather than quick wins.
Real world scenarios
- Greg shifts part of his retirement portfolio into a money market fund, prioritizing the safety of his principal.
- Ana chooses certificate of deposit (CD) ladders to maintain value with minimal risk while still earning modest interest.
- Kamal pares back aggressive stocks before retirement, focusing on capital preservation as his top goal.
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