Define: Defensive Investment Strategy

UK Accounting Glossary

Definition: Defensive Investment Strategy



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Full Definition of Defensive Investment Strategy


Defensive investment strategy is an investment approach to allocating a portfolio as to reduce the risk. In other words, a defensive investment strategy outlines a way to preserve principal and minimize volatility associated with the ups and downs of the market. Employing a defensive investment strategy necessitates investing primarily in bonds and other highly liquid investments, such as Treasury Bills and money market funds. A defensive investment strategy, however, does not have to be limited to bonds and cash equivalents. Thus, a defensive investment strategy may include various conservative securities known as defensive stocks. In order to qualify for a defensive investment strategy these stocks must be established and remain stable over time. Committing to a defensive investment strategy also implies that a low risk, defensive portfolio will bear a marginal return.


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Definition Sources


Definitions for Defensive Investment Strategy are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 7th February 2020.