Aggressive Investment Strategy

Go big or go home, baby! Some suckers invest scared, worried that they'll lose all their money and end up eating cans of discarded cat food in retirement.

Other players go strong at everything with the highest possible payouts. Emerging market smallcap equity funds...distressed third-world debt...speculative tech and biotech venture funds...anything to make the largest amount of money possible, knowing that the risks of cataclysm are massive. Put it all on 22 and let it ride!

That second group is following an extreme version of an aggressive investment strategy. Real-life examples don't (usually) go that far off the deep end, but the idea is the same: find investments with the highest possible upside, with ideas like generating income or protecting their principal somewhere far down the list of priorities.

In practice, "aggressive" usually means owning more stocks and fewer fixed-income investments. It also means favoring higher risk equities, as opposed to dividend payers or shares associated with slow-growing industries. Generally speaking, this approach works best when an investor is young and any short-term reverses can be made up over time. As retirement gets closer, most advisors will steer clients to less-aggressive strategies, which emphasize protecting capital as opposed to growth.