You need to know your style of investment and risk tolerance in order to choose investments more wisely. Tied with your risk tolerance are the 3 specific investment styles. Conservative, moderate, and aggressive are the 3 styles of investment.
Naturally, if you find that you have a low tolerance for risk, your investment style will most likely be conservative or moderate at best. You may be a moderate or aggressive investor if you have a high tolerance for risk. Determining the style of investing you use are your financial goals.
If you're trying to get together funds to buy a home in a year or two then aggressive style is better but if you're saving for retirement in your early twenties, use conservative or moderate style of investing.
Maintaining their initial investment is what conservative investors want. In other words, if they invest $5000 they want to be sure that they will get their initial $5000 back. Usually, this type of investor would invest in common stocks, short term money market accounts, and bonds.
Very common for conservative investors are interest earning savings account. Investing like conservative investors are moderate investor, except for the fact that they use a portion of their investment funds for investments with higher risk. What most moderate investors do is invest 50% of their investment funds in conservative and safe investments and the remainder would be invested in riskier investments.
An aggressive investor is willing to take risks that other investors won't take. They invest higher amounts of money in riskier ventures in the hopes of achieving larger returns - either over time or in a short amount of time. Aggressive investors often have all or most of their investment funds tied up in the stock market.
Your financial goals and risk tolerance will determine your style of investing. Carefully researching that type of investment is important regardless of which one you choose. Unless you have all the facts, don't invest!
Naturally, if you find that you have a low tolerance for risk, your investment style will most likely be conservative or moderate at best. You may be a moderate or aggressive investor if you have a high tolerance for risk. Determining the style of investing you use are your financial goals.
If you're trying to get together funds to buy a home in a year or two then aggressive style is better but if you're saving for retirement in your early twenties, use conservative or moderate style of investing.
Maintaining their initial investment is what conservative investors want. In other words, if they invest $5000 they want to be sure that they will get their initial $5000 back. Usually, this type of investor would invest in common stocks, short term money market accounts, and bonds.
Very common for conservative investors are interest earning savings account. Investing like conservative investors are moderate investor, except for the fact that they use a portion of their investment funds for investments with higher risk. What most moderate investors do is invest 50% of their investment funds in conservative and safe investments and the remainder would be invested in riskier investments.
An aggressive investor is willing to take risks that other investors won't take. They invest higher amounts of money in riskier ventures in the hopes of achieving larger returns - either over time or in a short amount of time. Aggressive investors often have all or most of their investment funds tied up in the stock market.
Your financial goals and risk tolerance will determine your style of investing. Carefully researching that type of investment is important regardless of which one you choose. Unless you have all the facts, don't invest!
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