Stock Investor Leads: All About Investment And Investing
Knowing what your risk tolerance and investment style are will help you choose investments more wisely
. Although there are many types of investments we can do, in fact there are only three specific investment styles- and the three styles associated 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 is likely conservative or moderate at best. If you have a high tolerance for risk, it is likely to be a moderate or aggressive investor. At the same time, your financial goals will also determine what investment style you use.
If you're saving for retirement than twenty years, you should use a conservative or moderate style of investing - but if you try to raise the money to buy a house in the next year or two, you want to use an aggressive style.
Everyone has a risk tolerance that should not be ignored. Each broker or financial advisers well know, and try to help you determine what risk tolerance. Then you have to work with you to find investments that do not exceed the risk tolerance.
Determination of risk tolerance involves several things. First, you need to know how much money you've invested and what investment and economic goals.
For example, if you plan to retire in ten years, and have not saved a penny for this, we need a high tolerance- because you need to do some aggressive- risky- Investments in order to reach your financial goal. In another part of the coin if it were in your twenties and you want to start investing in your retirement, your risk tolerance is low. You can afford to watch the money grow slowly over time.
Conservative investors want to maintain their initial investment. In other words, if they invest $ 5000 they want to be sure they have their first $ 5,000 Return of the type of investor usually invests in common stocks, bonds and accounts in the short term money market.
An interest earning savings account is very common for conservative investors. An investor usually invests much more moderate, as a prudent investor, but will use a portion 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 remainder in riskier investments.
An aggressive investor is willing to take risks that other investors will not take. They invest more money in risky ventures in hopes of achieving higher returns- whether in time or in a short period of time. Aggressive investors often have all or most of their investment funds tied to the stock market.
Even in this case to determine which investment style you are deciding your financial goals and risk tolerance. No matter what type of investment is made, however, carefully research investment. Do not invest without all the facts!
by: Michael SeoVida Francis
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