A defensive investor is an individual who approaches the world of investing with a cautious and risk-averse mindset. This investment strategy, popularized by Benjamin Graham, emphasizes the preservation of capital and minimizing potential losses over the pursuit of aggressive gains.

Defensive investors prioritize safety and stability in their investment choices. They tend to focus on well-established, financially sound companies with a history of consistent earnings and dividends. These companies are often leaders in their industries and possess strong fundamentals. By investing in such companies, defensive investors seek to create a diversified portfolio that can withstand market fluctuations and economic downturns.

Key principles of defensive investing include thorough research and analysis, maintaining a margin of safety by purchasing assets at a discount to their intrinsic value, and avoiding speculative or high-risk ventures. Additionally, defensive investors often lean towards investments with a long-term horizon, as this approach aligns with their emphasis on stability and minimizing short-term market volatility.

In essence, a defensive investor's goal is not to beat the market, but rather to achieve reasonable and consistent returns while mitigating the potential downside risks. This strategy is particularly suited for those who are risk-averse, seeking to build wealth steadily over time without exposing themselves to excessive market volatility.

A defensive investor is someone who prioritizes capital preservation and steady returns over high-risk, high-reward investments. This investment strategy focuses on minimizing risk and ensuring financial stability, often appealing to individuals with lower risk tolerance or those nearing retirement. Defensive investors typically allocate their portfolios to include a mix of blue-chip stocks, bonds, and other low-volatility assets. They may also prefer dividend-paying stocks, which provide a consistent income stream. The primary goal is to protect the principal investment and achieve moderate growth over time, rather than seeking aggressive gains. This cautious approach helps safeguard against market volatility and economic downturns, ensuring that the investor’s portfolio remains resilient during uncertain times.