INVESTING STYLES
Advice on investing styles and investing strategies

As a new investor, one of your first tasks is determine your risk tolerance and your investing style. Risk tolerance refers to how much money you can afford to lose. (Remember, you should never invest more money than you can afford to lose.) Your financial risk tolerance is also a determining factor in deciding your investing style.

There are three main investor styles:

1. Conservative investing style
2. Moderate investing style
3. Aggressive investing style.

Let’s look at each of these in detail.

1. Conservative Investors and conservative investing strategies

Conservative investors prefer low risk investments. Low risk investments include cash investments in savings accounts that give interest, money market accounts, mutual funds and Certificates of Deposit. The common feature of these type of investments is that they are very safe investments will slowly grow over a long period of time.

2. Moderate Investors

Moderate investors prefer low or moderate risks. Moderate investor strategies include investing in cash and bonds and safer stocks and shares on the stock market. They also include investing in property.

3. Aggressive Investors

Aggressive investors are happy with high risk investments. They do most of their investing on the stock market, often choosing high risk investments in the hope that they will yield high profits. Aggressive investors often invest in risky business ventures as well as higher risk property deals such as renovating old properties.

Understanding investments and risks

As a beginner looking for investment options, it’s important that you learn all you can about the different types of investments available and the potential gains and risks each offers.  You need to pay special attention to past trends as in the world of investments, history often repeats itself.

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