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.
If your tolerance for risk is low, then chances are your investment style is either conservative or moderate. But if your tolerance for risk is high, then you're probably a moderate or aggressive investor. At the same time, your financial goals will also determine what style of investing you use.
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.
Willing to take risks that other investors won't take is an aggressive investor. Hoping to get larger returns either over time or in a short period of time, they would invest higher amounts of money in riskier ventures. With aggressive investors, nearly all of their investment funds are 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!
If your tolerance for risk is low, then chances are your investment style is either conservative or moderate. But if your tolerance for risk is high, then you're probably a moderate or aggressive investor. At the same time, your financial goals will also determine what style of investing you use.
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.
Willing to take risks that other investors won't take is an aggressive investor. Hoping to get larger returns either over time or in a short period of time, they would invest higher amounts of money in riskier ventures. With aggressive investors, nearly all of their investment funds are 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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