Downside protection refers to strategies or measures taken to minimize potential losses in an investment. This can involve using financial instruments like options or diversifying a portfolio to reduce risk. The goal is to safeguard against significant declines in asset value, ensuring that investors can maintain their capital even during market downturns. Investors often seek downside protection to enhance their overall risk management. By implementing these strategies, they can focus on long-term growth while being prepared for unexpected market fluctuations. This approach is particularly important in volatile markets, where the potential for loss can be higher.