Defensive investments is more of a strategy than an actual investment. This is a process or strategy where an investor tries to reduce the level of risks as much as possible by investing in only low risk investments. The investor tends to focus on stable investments that have not just proven themselves in the market but have been able to stand the test of time.
What is Defensive investments
- Thread starter eldavis
- Start date
Defensive investment is a kind of hedge strategy use to protect the main investment in case there is sudden misfortune and accident. Every world reknown investor always use defensive investment to save his fund from uncertainty.
Defensive investments are those that behave well in times of crisis or other disasters that occur in the world for example a war or others, gold can be a defensive investment or invest in shares of companies related to primary needs such as food.
Defensive investment is good for people who do not have high risk tolerance. It's good they go with investment that will give them returns that can be small but it will put their mind at rest
There is absolutely need for risk management strategy to be adopted.
The use of defensive investment is important for countries to ensure their national security and protect their citizens from external threats, such as military attacks and terrorism. defensive investment can also have drawbacks, such as diverting resources away from other critical areas, such as education, healthcare, and infrastructure development.
Defensive investments are often applied to the world of stocks, by choosing to invest in stocks that can provide consistent dividends and stable price fluctuations, very suitable for novice investors, because of the low risk. The drawback of defensive stocks is that even though the stock price is bullish, it provides low profits.
Reducing the level of risk and maximizing profit would be a very good business idea.
A defensive investment is a kind of investment that they would venture into to make decent money for yourself.
