As an investor, you always want to make sure that you are able to protect your capital while still achieving modest growth over time. After all, the stock market is no stranger to volatility, and with unprecedented events like the COVID-19 pandemic causing economic uncertainties, the need for conservative investments has never been more crucial.

Here at FTM II, we specialize in developing and executing conservative investment strategies that are tailored to our clients’ unique needs and goals. In this article, we will explore the different facets of conservative investing, including strategies, portfolios, and what we believe is the best conservative investment strategy that can help you achieve your investment goals without taking unnecessary risks.

Conservative Investing
What is Conservative Investment Strategy?

What is Conservative Investment Strategy?

Conservative investment strategy refers to a set of tactics that allow investors to minimize risk exposure while preserving and growing capital over an extended period. The basic tenet of a conservative investment approach is to limit exposure to more volatile financial markets and focus on protecting the principal amount invested in less-risky assets. While conservative investments may provide modest returns compared to aggressive strategies, they are viewed as more stable, reliable and are typically less prone to the effect of market downturns.

Conservative Investing Strategies

There are several strategies that investors can opt for when adopting a conservative investment approach. These strategies may vary depending on personal circumstances, financial goals, and risk tolerance. Below are some of the more popular conservative investment strategies:

  • Diversification: Smart investors understand the importance of diversification. It involves spreading your capital across different asset classes. By spreading your capital across several investments, your portfolio is less exposed to any particular market risk, which could result in harm to your capital.
  • Income Investing: Income investing involves investing in income-generating assets. This strategy provides investors with stable income streams over an extended period, especially for those who are retired or close to it.
  • Value Investing: Value investing involves purchasing assets at a discount compared to their intrinsic value. Value investing requires a lot of research to identify the right assets that have solid fundamentals with favorable long-term growth prospects.
  • Buy-and-Hold: This is a long-term investment strategy that involves buying  assets and holding them for an extended period. This approach disregards short-term market fluctuations and emphasizes long-term goals, focusing on the accumulation of wealth over time.

Conservative Investment Portfolio & Strategy

A conservative investment portfolio is made up of assets that are geared toward minimizing potential risk while maintaining a stable return to the investor. The typical conservative portfolio consists of a mix of asset classes.

Determining the best conservative investment strategy is dependent on your personal circumstances. However, in our view, the most effective conservative investment strategy is a well-diversified low-cost portfolio. The key is a balance of assets, with lower fees and stable returns, making them an excellent option for conservative investors looking for solid long-term returns.

Investing is a crucial decision that can have significant long-term implications for your wealth. Conservative investment strategies offer investors an opportunity to generate modest returns over an extended period without taking on undue risk. The strategies include diversification, income investing, value investing, and buy-and-hold, each of which plays an essential role in any conservative investment portfolio.

Here at FTM II, our focus is on providing low-cost, diversified, and sustainable investment that helps you achieve your investment objectives. Our philosophy is grounded in a commitment to protecting your principal and generating competitive returns for you in the long-term. Contact us today to learn more about how we can help you pursue a conservative investment strategy that meets your needs.