Risk Profile: The Aggressive Investor
Do you know the kind of investor personality you are? Knowing this will change the way you invest your money in property, and more importantly, ensure that you make more informed decisions depending on the level of comfort with risk you have. To different people, winning means different things and when it comes to investment risk profiles, there are different strategies of winning. All these are defined in different investor profiles. Here, we’ll discuss the aggressive investor in detail.
What’s Unique in the Aggressive Investor’s Risk Profile?
The aggressive investor is that who sees value in risk. Therefore, at the very core of their investment characteristics is the ability to take and tolerate higher risks with their money but with the objective of gaining higher returns depending on the movements of the markets.
Since investors in this risk profile endeavor to outperform the markets, they end up exposed to many risks while investing in what is known to be their areas of interest, including equity investments such as mutual funds and individual stocks. While they see large short term swings in market performance as an advantage to their investment activity, they are prone to the risk of the effect of slumps in market activity. Hence, a little guidance for this risk profile, such as the one we provide, is very important for strategic choice of investments.
Although the risk profile may include people of any age, most aggressive investors are young and most of the time wants to pump large sums of money into their investment portfolios periodically over time. They do this with the aim of accumulating substantial wealth over the years of their planned investments.
The typical aggressive investor will choose investment options that are long term – 10 years at the minimum. The advantage of this trait is that a higher capital gain is always likely to be achieved because aggressive funds have larger portions that are allocated towards riskier asset classes such as equity and property.
The ability to wait for long term investments to bear fruit is known to be a trait of this risk profile, although most of the time, investors here will periodically invest when they see high risk opportunities with the hope of gaining more benefits. This is attributed to the fact that aggressive investors do not depend on their investments for immediate income because they already have an income from other sources.
Article by James Parnwell & Jess Dovane
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