What is 'Conservative Investing'

Conservative investing is an investing strategy that seeks to preserve an investment portfolio's value by investing in lower risk securities such as fixed-income and money market securities, and often blue-chip or large-cap equities.

BREAKING DOWN 'Conservative Investing'

Conservative investors have risk tolerances ranging from low to moderate. Those who have low risk tolerance are often extremely uncomfortable with the stock market and wish to avoid it entirely. However, although this strategy may protect against inflation, it will not earn any value over time.

Capital preservation and current income are popular conservative investing strategies.

RELATED TERMS
  1. Conservative Growth

    An investment strategy that aims to grow invested capital over ...
  2. Cash Plus Fund

    A type of fund, commonly found in Australia, that is formulated ...
  3. Balanced Investment Strategy

    A portfolio allocation and management method aimed at balancing ...
  4. Preservation Of Capital

    An investment strategy where the primary goal is to preserve ...
  5. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment ...
  6. Current Income

    The investment objective for a moderately conservative portfolio ...
Related Articles
  1. Managing Wealth

    How To Be A Conservative Investor

    It may not be the most exciting path to take in the investing world, but conservative investing is an extremely safe bet.
  2. Managing Wealth

    Achieving Optimal Asset Allocation

    Minimizing risk while maximizing return with the right mix of securities is the key to achieving your optimal asset allocation.
  3. Financial Advisor

    How to Tell if You're Investing Too Conservatively

    Investing is a balance between growing and preserving your money. It's understandable to want to be conservative, but what about being too conservative?
  4. Investing

    Asset Allocation Models: Comparing 3 Traditional Strategies

    Learn about the three most common asset allocation models: conservative, moderate and aggressive.
  5. Trading

    What Is Your Risk Tolerance?

    Forget the cliches and uncover how much volatility you can really stand.
  6. Financial Advisor

    When Couples Have Different Risk Appetites

    Communication, compromise and frequent monitoring will lead to successful investing for spouses with different risk tolerances.
  7. Investing

    Understanding Risk Tolerance

    Risk tolerance measures the degree to which an investor will accept risk in exchange for a better return.
  8. Investing

    What's a Blue-Chip Stock?

    A blue-chip stock is stock of a company that has been operating successfully for many years and has a market capitalization in the billions. Most blue-chip companies are leaders in their industry. ...
  9. Retirement

    How to Change Your Retirement Plan

    Retirement is one of those things you plan for but it can't be etched in stone. From asset allocation to risk tolerance, it must change when life happens.
  10. Managing Wealth

    Using Time Horizons In Investing

    Time-horizon investing is all about planning. You need to think about your goals and select investments based on the amount of time you have until the goal must be funded.
RELATED FAQS
  1. How do I determine what percentage of my portfolio to invest in blue chip stock?

    Learn how to determine what percentage of a portfolio should be invested in blue-chip stocks. Understand what strategy is ... Read Answer >>
  2. What percentage of a diversified portfolio should large cap stocks comprise?

    Learn more about achieving optimal diversification of an investment portfolio, and specifically about the percentage of large-cap ... Read Answer >>
  3. Have hedge funds eroded market opportunities?

    Learn why there is still plenty of opportunity for investors even though hedge funds have grown substantially. Read about ... Read Answer >>
  4. What are the drawbacks of a small investor buying blue-chip stocks?

    Understand what a blue-chip stock is and learn about the drawbacks a small investor might face when investing in blue-chip ... Read Answer >>
  5. What is the benefit of investing in blue chip stocks?

    Learn what blue-chip stocks are, what attributes blue-chip stocks have and how investors can benefit from an investment in ... Read Answer >>
Hot Definitions
  1. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  2. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  3. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  4. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  5. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  6. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
Trading Center