How To Define Your Investment Style

Your investments can be planned according to the type of savings you wish to choose and also the amount of risk you can take. Although there are many types of investments the three main types of investments are conservative, moderate and aggressive. One can choose among these three types taking into consideration the amount of risk they can bear.

Moderate or considerate are the two best types you can choose from if you can permit only a low risk factor. But if you are of the adventurous type and like taking high risk then you can very well choose from moderate to aggressive type of investment. Apart from this your financial target plays a very important role while selecting the type you wish to invest.

 

For example if you are planning to buy a house in a year or two then the type of invest you should choose should be aggressive. Whereas, if it is a saving for your retirement and you are still young, then a conservative or moderate type of investment will be the right choice.

 

People who choose conservative type of investment see to it that their capital amount is retained. They make sure that if they invest $5000 they get the same amount back. Such investors invest their money in short term money markets and also in common stocks and bonds. Another common factor with these conservative investors is that they make it a point to maintain a interest savings account.

 

A person who is a moderate investor invests like a conservative investor but at times uses his funds in more risk investments. They take equal chances in both the types of investments that is half of their funds are invested the conservative pattern whereas the other half in put into more speculative investments.

 

The third type of investor is totally different. He is an aggressive investor who can stake more money for higher returns. This can be for a long time or even for a short time. Such aggressive investors invest most of their funds in the stock market.

 

Finally the type of investment again depends on the financial target the person wishes to choose and also the amount of risk he is ready to take. Necessary research and study should be made before the investment are done and by no means go for any type investment before knowing all the details about it.