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Terms Beginning with D
       
       
 

Defensive Instruments

Financial Term


1. Bonds and Treasuries - These instruments are considered defensive as they are generally less volatile than stocks. They are typically used by investors to generate income from regular interest payments, while also providing a cushion against market declines.

2. Options - Options are contracts that provide the buyer with the right, but not the obligation, to buy or sell an asset at a predetermined price. These instruments can be used to hedge against potential losses in a stock portfolio.

3. Mutual Funds and ETFs - These funds invest in a variety of assets, such as bonds, stocks, and commodities. Defensive mutual funds and ETFs typically hold a larger proportion of bonds, which can provide an element of stability to a portfolio.

4. Commodities - Certain commodities, such as gold and silver, are considered defensive instruments as they tend to hold their value during times of economic uncertainty.

In the financial industry, defensive instruments are used by investment managers, hedge funds, and other financial institutions to protect their clients' portfolios against downside risk. These instruments can help to balance out a portfolio and protect against market fluctuations, while also providing potential returns through interest income or appreciation in value. Overall, defensive instruments are an important tool for investors looking to manage risk and preserve capital.


   
     

Defensive Instruments

Financial Term


1. Bonds and Treasuries - These instruments are considered defensive as they are generally less volatile than stocks. They are typically used by investors to generate income from regular interest payments, while also providing a cushion against market declines.

2. Options - Options are contracts that provide the buyer with the right, but not the obligation, to buy or sell an asset at a predetermined price. These instruments can be used to hedge against potential losses in a stock portfolio.

3. Mutual Funds and ETFs - These funds invest in a variety of assets, such as bonds, stocks, and commodities. Defensive mutual funds and ETFs typically hold a larger proportion of bonds, which can provide an element of stability to a portfolio.

4. Commodities - Certain commodities, such as gold and silver, are considered defensive instruments as they tend to hold their value during times of economic uncertainty.

In the financial industry, defensive instruments are used by investment managers, hedge funds, and other financial institutions to protect their clients' portfolios against downside risk. These instruments can help to balance out a portfolio and protect against market fluctuations, while also providing potential returns through interest income or appreciation in value. Overall, defensive instruments are an important tool for investors looking to manage risk and preserve capital.


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