How is a "conservative investor" characterized?

A conservative investor is primarily characterized by their focus on capital preservation, which means they prioritize protecting the money they have invested rather than seeking high returns. This type of investor typically prefers low-risk investment options, even if those options result in lower potential returns.

By focusing on preserving capital, conservative investors often allocate their portfolios towards fixed-income investments, like bonds, or other low-volatility assets, rather than stocks or high-risk securities. This approach allows them to avoid significant losses that could arise from market fluctuations while still achieving modest growth through interest or dividends.

The other options describe investment profiles that do not align with the conservative approach. For instance, a high tolerance for risk indicates an aggressive investor, while a focus on maximizing short-term gains suggests a speculative strategy that contrasts with the conservative investor’s emphasis on stability. Lastly, active trading is characteristic of a more dynamic or aggressive investing style, which again does not resonate with the conservative investor's goals.