Which objective is associated with capital preservation?

The objective of capital preservation is fundamentally about protecting the value of investments. This approach seeks to minimize the risk of losing principal while maintaining liquidity and ensuring that the investments can at least retain their purchasing power over time.

Investors who prioritize capital preservation typically look for stable, lower-risk investment options, such as government bonds or money market funds, which provide safety and security rather than the potential for high returns. The focus is on maintaining the initial investment amount rather than aggressively increasing it, which aligns perfectly with protecting the value of investments.

In contrast, the other options represent strategies that do not align with the principle of capital preservation. Strategies emphasizing high returns or aggressive growth often involve a higher level of risk, which can jeopardize the initial capital. Thus, while those strategies may offer potential rewards, they conflict with the objective of protecting the investment's value.