{"id":4700,"date":"2020-05-26T02:19:58","date_gmt":"2020-05-26T02:19:58","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=4700"},"modified":"2021-12-15T11:19:40","modified_gmt":"2021-12-15T11:19:40","slug":"what-is-defensive-investing-and-why-is-it-right-for-you","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/","title":{"rendered":"What is defensive investing, and why is it right for you"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_40 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" area-label=\"ez-toc-toggle-icon-1\"><label for=\"item-69d57fe967c78\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-69d57fe967c78\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/#Defensive_investing_is_ideal_for_most_investors\" title=\"Defensive investing is ideal for most investors\">Defensive investing is ideal for most investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/#What_is_the_defensive_or_passive_approach_to_investing\" title=\"What is the defensive or passive approach to investing? \">What is the defensive or passive approach to investing? <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/#Interested_in_how_we_think_about_the_markets\" title=\"Interested in how we think about the markets?\">Interested in how we think about the markets?<\/a><\/li><\/ul><\/nav><\/div>\n<p><img loading=\"lazy\" class=\"wp-image-4701 alignleft\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2020\/05\/Swapnil-Kendhe-Profile-Pic.jpg\" alt=\"\" width=\"104\" height=\"104\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2020\/05\/Swapnil-Kendhe-Profile-Pic.jpg 1178w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2020\/05\/Swapnil-Kendhe-Profile-Pic-150x150.jpg 150w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2020\/05\/Swapnil-Kendhe-Profile-Pic-300x300.jpg 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2020\/05\/Swapnil-Kendhe-Profile-Pic-768x768.jpg 768w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2020\/05\/Swapnil-Kendhe-Profile-Pic-1024x1024.jpg 1024w\" sizes=\"(max-width: 104px) 100vw, 104px\" \/><strong><em>Swapnil Kendhe is founder, SEBI registered investment adviser (RIA) and a fee-only financial planner at<\/em> <a href=\"http:\/\/vivektaru.com\/\">vivektaru.com<\/a>. He charges a fixed annual fee for financial planning and investment advice directly from his clients.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Defensive_investing_is_ideal_for_most_investors\"><\/span><strong>Defensive investing is ideal for most investors<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><strong>\u00a0<\/strong><\/p>\n<p>Most investors believe that to do well as an investor, they must invest in stocks, use different categories of mutual funds, search for the best performing funds or PMS schemes, regularly review and change the portfolio based on changing economic and market conditions, and generate a high return as they can. Some investors try to do this on their own, while others want their advisers to do this job for them. Unfortunately, this is a wrong notion of how investing must be done.<\/p>\n<p>&nbsp;<\/p>\n<p>There are two approaches to investing. One is the enterprising or active approach and other the defensive or passive approach. Benjamin Graham talks about these two approaches in his book \u2018The Intelligent Investor\u2019. What most investors believe how good investing is done is enterprising investing.<\/p>\n<p>&nbsp;<\/p>\n<p>Successful enterprising investing requires high-quality knowledge of investing. We are talking about the fund manager level of knowledge here. Most investors lack the interest, aptitude and the drive required to reach such a level of knowledge. Knowledge alone is also not enough to do the enterprising investing; you need loads of time as well, to do the research. Retail investors with their full-time jobs and superficial understanding of investing should stay away from this approach with or without an adviser.<\/p>\n<p>&nbsp;<\/p>\n<p>Why should retail investors avoid enterprising investing even with an adviser? Because it is difficult to find an adviser competent enough to help investors do enterprising investing successfully. Even if investors find one, the time and effort the adviser must put to help them do the enterprising investing are huge. If the adviser charges a fee for the hours of his effort, he would become unaffordable for the size of most retail investor portfolios. Even after paying the higher fee, there is no guarantee that the return would be higher than what can be generated by following the simple approach of defensive or passive investing.<\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"What_is_the_defensive_or_passive_approach_to_investing\"><\/span><strong>What is the defensive or passive approach to investing? <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>In the defensive or passive approach, the investor places his chief emphasis on avoidance of serious mistakes and losses. His second aim is to be free from effort, annoyance and the need for making frequent decisions. He creates a portfolio that can run on autopilot and doesn\u2019t require frequent monitoring and changes.<\/p>\n<p>&nbsp;<\/p>\n<p>A simple low-cost index fund is good enough for equity allocation in a defensive investor\u2019s portfolio. It helps him beat the equity return of most professional investors.<\/p>\n<p>&nbsp;<\/p>\n<p>A defensive investor uses the debt side of the portfolio to provide stability to the portfolio, not to generate a higher return. He keeps credit risk and interest rate risk as low as possible. He makes optimum use of government products like Employee Provident Fund, Public Provident Fund and Sukanya Samriddhi Yojana. To maintain the liquidity in the portfolio he uses bank fixed deposits of government banks or bigger and well run private sector banks and liquid funds.<\/p>\n<p>&nbsp;<\/p>\n<p>A defensive investor doesn\u2019t believe that he can dynamically manage asset allocation of his portfolio based on changing economic and market conditions. He decides the target asset allocation and rebalances the portfolio once in a year. He doesn\u2019t over concentrate the portfolio in any one asset class.<\/p>\n<p>&nbsp;<\/p>\n<p>Defensive investing is simple, boring and generates little excitement; but it works. And it works better than most smart-sounding approaches of investing. It takes little time and effort on part of the investor; all that is required is discipline.<\/p>\n<p>&nbsp;<\/p>\n<p>Investing at the retail investor level is more about avoiding mistakes than generating higher returns. Retail investors can avoid most investing mistakes if they appreciate that they can never have the time and knowledge required for the enterprising investing. Defensive investing is ideal for most of them.<\/p>\n<p>&nbsp;<\/p>\n<p><strong><em>** Opinions expressed are the authors and should not be construed as investment advice.<\/em><\/strong><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Interested_in_how_we_think_about_the_markets\"><\/span>Interested in how we think about the markets?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Read more:\u00a0<a href=\"https:\/\/kuvera.in\/blog\/category\/zen-and-the-art-of-investing\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Zen And The Art Of Investing<\/strong><\/a><\/p>\n<p>Watch\/hear on YouTube:<\/p>\n<p><iframe loading=\"lazy\" title=\"KUVERA in Media\" src=\"https:\/\/www.youtube.com\/embed\/videoseries?list=PLDSzQdT9nLmDSP3gSlDkPcUl-cfeI-KeB\" width=\"640\" height=\"360\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>Start investing through a platform that brings goal planning and investing to your fingertips. Visit\u00a0<a href=\"https:\/\/www.kuvera.in\/\"><strong>kuvera.in<\/strong><\/a>\u00a0to discover\u00a0<a href=\"https:\/\/kuvera.in\/blog\/direct-plans-better\/\"><strong>Direct Plans<\/strong><\/a> and\u00a0<a href=\"https:\/\/kuvera.in\/user\/login\"><strong>start investing today.<\/strong><\/a><\/p>\n<p>#MutualFundSahiHai, #KuveraSabseSahiHai!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Swapnil Kendhe is founder, SEBI registered investment adviser (RIA) and a fee-only financial planner at vivektaru.com. He charges a fixed annual fee for financial planning and investment advice directly from his clients. &nbsp; &nbsp; &nbsp; Defensive investing is ideal for most investors \u00a0 Most investors believe that to do well as an investor, they must [&#8230;]<\/p>\n<p><a class=\"btn btn-secondary understrap-read-more-link\" href=\"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/\">Read More&#8230;<\/a><\/p>\n","protected":false},"author":7,"featured_media":4703,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[91],"tags":[93,73,19],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is defensive investing, and why is it right for you - Kuvera<\/title>\n<meta name=\"description\" content=\"What is defensive investing and how does it differ from enterprising or active investing? Which one is better for you? Read and find out.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is defensive investing, and why is it right for you - Kuvera\" \/>\n<meta property=\"og:description\" content=\"What is defensive investing and how does it differ from enterprising or active investing? Which one is better for you? Read and find out.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/\" \/>\n<meta property=\"og:site_name\" content=\"Kuvera\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/kuvera.in\" \/>\n<meta property=\"article:published_time\" content=\"2020-05-26T02:19:58+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-12-15T11:19:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2020\/05\/Capture-2.png\" \/>\n\t<meta property=\"og:image:width\" content=\"618\" \/>\n\t<meta property=\"og:image:height\" content=\"362\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Guest Blogger\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Kuvera_In\" \/>\n<meta name=\"twitter:site\" content=\"@Kuvera_In\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Guest Blogger\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What is defensive investing, and why is it right for you - Kuvera","description":"What is defensive investing and how does it differ from enterprising or active investing? Which one is better for you? Read and find out.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/","og_locale":"en_US","og_type":"article","og_title":"What is defensive investing, and why is it right for you - Kuvera","og_description":"What is defensive investing and how does it differ from enterprising or active investing? Which one is better for you? Read and find out.","og_url":"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/","og_site_name":"Kuvera","article_publisher":"https:\/\/www.facebook.com\/kuvera.in","article_published_time":"2020-05-26T02:19:58+00:00","article_modified_time":"2021-12-15T11:19:40+00:00","og_image":[{"width":618,"height":362,"url":"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2020\/05\/Capture-2.png","type":"image\/png"}],"author":"Guest Blogger","twitter_card":"summary_large_image","twitter_creator":"@Kuvera_In","twitter_site":"@Kuvera_In","twitter_misc":{"Written by":"Guest Blogger","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/#article","isPartOf":{"@id":"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/"},"author":{"name":"Guest Blogger","@id":"https:\/\/kuvera.in\/blog\/#\/schema\/person\/3b7368367bae36c89b81169ff2e15f65"},"headline":"What is defensive investing, and why is it right for you","datePublished":"2020-05-26T02:19:58+00:00","dateModified":"2021-12-15T11:19:40+00:00","mainEntityOfPage":{"@id":"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/"},"wordCount":741,"commentCount":3,"publisher":{"@id":"https:\/\/kuvera.in\/blog\/#organization"},"keywords":["Investment Advisor","Tax Planning","Wealth Management"],"articleSection":["Investment Advisor"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/","url":"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/","name":"What is defensive investing, and why is it right for you - Kuvera","isPartOf":{"@id":"https:\/\/kuvera.in\/blog\/#website"},"datePublished":"2020-05-26T02:19:58+00:00","dateModified":"2021-12-15T11:19:40+00:00","description":"What is defensive investing and how does it differ from enterprising or active investing? Which one is better for you? Read and find out.","breadcrumb":{"@id":"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/kuvera.in\/blog\/what-is-defensive-investing-and-why-is-it-right-for-you\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/kuvera.in\/blog\/"},{"@type":"ListItem","position":2,"name":"What is defensive investing, and why is it right for you"}]},{"@type":"WebSite","@id":"https:\/\/kuvera.in\/blog\/#website","url":"https:\/\/kuvera.in\/blog\/","name":"Kuvera","description":"Wealth Management, Simplified","publisher":{"@id":"https:\/\/kuvera.in\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/kuvera.in\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/kuvera.in\/blog\/#organization","name":"Kuvera","url":"https:\/\/kuvera.in\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/kuvera.in\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/cropped-cropped-kuvera-logo-dark-3.png","contentUrl":"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/cropped-cropped-kuvera-logo-dark-3.png","width":83,"height":13,"caption":"Kuvera"},"image":{"@id":"https:\/\/kuvera.in\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/kuvera.in","https:\/\/twitter.com\/Kuvera_In","https:\/\/www.instagram.com\/kuvera.in","https:\/\/www.linkedin.com\/company-beta\/10456535\/"]},{"@type":"Person","@id":"https:\/\/kuvera.in\/blog\/#\/schema\/person\/3b7368367bae36c89b81169ff2e15f65","name":"Guest Blogger","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/kuvera.in\/blog\/#\/schema\/person\/image\/","url":"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/07\/guest-author-150x150.png","contentUrl":"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/07\/guest-author-150x150.png","caption":"Guest Blogger"},"description":"At Kuvera, we invite the best industry experts, personal finance bloggers and thinkers to share their views with our investors. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official stand of Kuvera.","url":"https:\/\/kuvera.in\/blog\/author\/guest-blogger\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/posts\/4700"}],"collection":[{"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/comments?post=4700"}],"version-history":[{"count":3,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/posts\/4700\/revisions"}],"predecessor-version":[{"id":9370,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/posts\/4700\/revisions\/9370"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/media\/4703"}],"wp:attachment":[{"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/media?parent=4700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/categories?post=4700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/tags?post=4700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}