All > Business > Finance > Personal Finance
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.Yahoo Finance - Cite This Source - This Definition
- Browse Related Terms: Accredited investor, Appreciation, Boiler room, Capital preservation, churning, Collectible, Financial pyramid, Formula investing, Haircut, Indexed annuity, Inflation-adjusted return, opportunity cost, Real interest rate, Risk, Risk Tolerance, Time value of money