INVESTING MONEY GUIDE

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General Investing >> What Is Your Investment Style?

Choosing an investment style depends on the type of investor you are. It is your risk tolerence level that determines your investment style. There are basically three investment styles which are aggressive, moderate and conservative. There are agressive investors who are risk-takers and conservative investors who are risk-averse. Your financial goals also play a part in influencing your investment style.

Naturally, if you need money to buy a house within one or two years time, you would use an aggresive style of investing expecting high returns in a short time frame, however, the risks are very great. An example is investing in the stock market

Your investment style will probably be conservative if you have a low tolerance for risk. This is true for those investing for retirement or for their children education funds. Typically, conservative investors want to protect their initial investmeent sum and at the same time expect a decent amount of returns. Investing in bonds and short term money market instruments would be suitable for this group of investors.

A moderate investor will diversified his or her investments to include riskier investments for better returns.For example a moderate investor may invest 50% of their investment funds in conservative investments, and invest the remainder in high risk investments.

At the end of the day, deciding the style of investing you will use is influenced by your financial goals and your risk tolerance levels. Before investing, get all the facts first on the type of investments you are interested in. You want to be reasonably sure that your investments you invest in will meet your financial goals.

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