Capital preservation

Preservation of Capital

A conservative investment strategy that attempts merely to avoid the loss of value. Retirees often prefer this strategy for their savings because the rate of return is designed only to keep up with inflation, ensuring that the value of their savings does not decrease over time. This often works in the short-term for pensioners, but using capital preservation as a long-term strategy often adds exposure to inflation risk rather than reduces it. Capital preservation strategists usually invest in fixed-income securities and other low-risk investments.

Capital preservation.

Capital preservation is a strategy for protecting the money you have available to invest by choosing insured accounts or fixed-income investments that promise return of principal.

The downside of capital preservation over the long term is that by avoiding the potential risks of equity investing, you exposure yourself to inflation risk.

That's the case because your investments are unlikely to increase enough in value to offset the gradual loss of purchasing power that's a result of even moderate inflation.

References in periodicals archive ?
The funds are designed for investors who wish for a retirement income, capital preservation and total returns.
Annaly's principal business objective is to generate net income for distribution to its stockholders through capital preservation, prudent selection of investments, and continuous management of its portfolio.
27 billion (as on December 31, 2016), Al Meezan offers a diverse range of Shariah-compliant investment solutions ranging from equity, asset allocation, fixed income, money market, balanced, capital preservation, fund of fund, commodity and voluntary pension schemes.
In looking at how and why active investments post superior investment statistics than passive funds, the Dalbar team points to stronger investor retention during market downturns, asset allocation and capital preservation strategies of active investments as being advantageous.
As per the funds sponsor, Lotus Capital, the main goal of the fund is to produce vying returns from investments in Shariah compliant fixed revenue securities and deals, while guaranteeing capital preservation.
KARACHI -- Al Meezan Investment Management Limited (Al Meezan) is pleased to announce the launch of Meezan Capital Preservation PlanII (MCPPII), which is the sixth in the series of capital protection / preservation plans / funds launched by the company.
The investment strategy of the company will focus on capital preservation, while offering potentially significant equity returns to shareholders.
Onex continues to believe that its success in building companies and its record of capital preservation and superior returns are direct results of the strong alignment of interests between Onex, its shareholders, the limited partners and the management team.
Tidjane Thiam, Pru's group chief financial officer, said: "We are focused on capital preservation and on profitable and capital efficient growth in all our markets.
Nabil Maroof, NBK Capital's Managing Director of Asset Management, said that "Investor flight to quality has driven the demand for NBK's extensive expertise and conservative approach which emphasizes on attractive returns and capital preservation.
They have long been valued for their capital preservation qualities, particularly among high-net worth individuals and other private investment interests.
Congress expressly instructed the Labor Department to consider capital preservation products," Luken writes.

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