What is capital preservation?

Capital preservation refers to an investment strategy aimed at protecting an investor's principal amount from loss. This approach prioritizes safeguarding the initial investment over generating high returns, making it suitable for risk-averse investors or those nearing financial goals. Common vehicles for capital preservation include savings accounts, certificates of deposit (CDs), and government bonds, which typically offer lower risk and lower returns. The main objective is to ensure that the original investment remains intact, even in volatile market conditions.