Compliance
Capital Preservation
Investment strategies focused on preventing loss of principal in a portfolio.
What is Capital Preservation
Capital preservation is an investment strategy aimed at safeguarding the principal amount in a portfolio, ensuring that the initial investment is not lost. This approach is particularly important for family offices seeking to maintain wealth across generations by minimizing risk and focusing on stable, low-volatility assets.
Strategies for Capital Preservation
Common strategies for capital preservation include investing in government bonds, high-quality corporate bonds, money market funds, and other low-risk securities. These investments are chosen for their ability to provide steady returns while protecting the principal from market fluctuations.
Related Terms
Asset Allocation
The process of distributing investments among various asset classes to balance risk and reward according to an individua...
ViewDiversification
Investing in a variety of assets to reduce exposure to any single asset or risk.
ViewLiquidity
The ability to buy or sell an asset quickly and easily at a price close to its fair market value.
ViewRisk Management
The process of identifying, assessing, and mitigating risks that could affect the family office.
ViewWealth Preservation
Strategies aimed at protecting existing wealth from erosion due to taxes, inflation, or market risks.
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