What Is Your Investment Style?

This is one tip of investment tips

Learn what your risk tolerance and investment style can help you choose investments more wisely. Although there are many different types of investments that you can do, in fact there are only three specific investment styles - and those three styles tie with your risk tolerance. The three investment styles are conservative, moderate and aggressive.

Of course, if you find you have a low tolerance for risk, your investment style will most likely be conservative or moderate at best. If you have a high tolerance for risk, is likely to be a moderate or aggressive investor. At the same time, your financial goals also determine which type of investment that is used.

If you're saving for retirement in 20 years, you should use a conservative or moderate style of investing - but if you're trying to raise money to buy a home in the next year or two, you want to use an aggressive style.

Conservative investors want to keep their initial investment. In other words, if you invest $ 5,000 you want to be sure you receive the initial $ 5,000 back. This type of investor usually invests in common stocks and bonds and bank short-term money market.

The interest earning savings account is very common for conservative investors.
An investor usually invests much more moderate as a prudent investor, but will use part of their investment funds for high-risk investments. Many moderate investors invest 50% of their investment funds in safe or conservative investments, and invest the rest in riskier investments.

An aggressive investor is willing to take risks that other investors do not accept. They invest more money into riskier businesses, with the hope of higher returns - either over time or in a short period of time. Aggressive investors often have all or most of their funds invested in the stock market.

Again, the determination that the investment style you will use will be driven by financial goals and risk tolerance. No matter what type of investment, however, should carefully research that investment. Never invest without having all the facts!


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