DEFENSIVE INVESTMENT STRATEGY

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Defensive investing means investing in strategy that will minimize loss of capital in a portfolio. The primary objective of defensive investment strategy is the preservation of capital.

A defensive investment strategy involves regular portfolio rebalancing to maintain the desired asset allocation.

There are a number of defensive strategies an investor or portfolio manager can employ to mitigate against losses such as investing in infrastructure funds like that of FG sukkuk bonds, treasury bills, blue chip stocks and stable values such as gold, platinum and silver.

Investor will be protected against significant losses from major market downturns by buying defensive stocks, engaging in short term treasury bills, trading across countries, placing stop loss order and holding cash especially in down market and finally spreading the entire portfolio across a number of industries to reduce risk through diversification.

Investdata Academy

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