Capital preservation refers to all strategies, rules, product features, or structural measures aimed at protecting invested capital from significant losses.
In active trading, capital preservation can be achieved through stop-loss orders, position sizing limits, or hedging strategies. In asset management, it is implemented through diversification, low-risk allocations, or structured products with capital protection features.
The level of capital preservation depends on the chosen model: full capital protection—where invested capital is guaranteed under all scenarios—typically comes with lower return potential.
In practice, the goal is usually to strike a balance between return potential and acceptable risk of loss. In the context of DEECKE Financial Solutions, capital preservation is a central guiding principle of both investment strategies.
