Everyone has different tolerances toward investing risk. How comfortable you are with the possibility of losing money, what are your timeframes to invest and how do you emotionally deal with volatile returns? Consider investments that balance your appetite for risk with their ability to reach your financial goals. This is a decision that is very specific to you and it is a very important one. Only you can determine your ‘sleep at night’ factor.
So consider the general investor risk profile – what is yours?
Conservative – Aim is Capital Protection – you require stable growth with the least risk and/or high income, and look at your investments rarely or every few years, and need return in 12-24 months
Cautious – Capital Protection also, but fairly stable growth and moderate income and investment period is looking at 3 years or more
Moderate – Capital Growth and Income balance, can tolerate some fluctuations in investment value with some income, investing for 5 years or more
Moderately Aggressive – Higher Capital Growth – and lower income is the focus, and looking at being invested for 5-10 years
Aggressive – Highest Capital Growth return with little concern for income, fluctuations in short term accepted in pursuit of highest return, looking at 10 years and over
You may like to consider using one of many tools available (not a recommendation, such suggestions) –
To look at general principles of how you could invest across the various asset classes based on your profile, go to our post Masterclass – Member Risk Profile is Important
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