Business, Legal & Accounting Glossary
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.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Defensive Investment Strategy are sourced/syndicated and enhanced from:
This glossary post was last updated: 7th February, 2020 | 3 Views.