What is a defensive investment strategy?
A defensive investment strategy is a strategy that includes a portfolio of investment options to minimize the risk of losses for the investor. Popular choices for defensive investment strategy include bonds, currency, very safe stocks and possibly rare metals. This type of investment strategy can be recommended for some because they are approaching the age of retirement or for those who are not willing to risk a lot. At this stage, a certain amount of loss is acceptable compared to the profit that can be realized. Also, if there is a loss, there is more time to return. A defensive investment strategy therefore does not provide much in terms of financial profits for those who look at the retirement decade into the future. By this time, the investor has probably built a good amount money in his portfolio. The loss of a significant part of this at this stage could lead to catastrophic results. This could result in a retirement delay in the financial interest. At some pointThe investor's work life is not to increase profits, but to protect these profits from annual fluctuations that may occur on the stock market.
bonds, especially government bonds, become a primary means of performing this investment strategy. Given that government bonds are very safe, investing in them is considered to be a defensive investment strategy. The safest bonds are federal bonds, but even municipal bonds in most cases have great security.
Company bonds can also be a good defense investment strategy. Although they are not as safe as government bonds, looking at the evaluation of the company's bonds can provide the investor's ability to repay his obligations. Yet those who are looking for an extremely safe, reliable strategy may be less willing to consider corporate bonds.
keeping some penIt is also a defensive investment strategy for trading in international currency, but as an advance. The currency, if the government is not threatened, will always retain some value. However, it should be noted that if there is no deflation, the longer the currency is held, the less valuable it will be. Most financial advisors probably do not propose to a wise strategy.