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.
Related or Semi-related Video
Finance: What is a Diversified Mutual Fu...20 Views
finance a la shmoop what is a diversified mutual fund? all right people
listen up it's lots of investments stocks bonds exposure to risk and reward [Risk and reward punch man in face]
everywhere energy, telecom, insurance, real estate, banking, chemicals, tech, retail not
enough diversity yet well those are just sectors or industries and there's a
whole bunch of them what about geography geographic diversity the US, Russia, China
Europe someday maybe Mars Elon what do you think well maybe exposures to [Elon Musk floating in space]
different currencies or commodities cycles as the diversity you seek hmm
well that's diversity Benetton eat your heart out so the bigger question is why
would you want such diversity? well the idea is that you mitigate risk by being
diverse the don't put all your eggs in one basket thing if one investment goes [Value of investment graph appears]
bust well at least you have plans B C and D to fall back on and if this is
grabbing you check out our videos on efficient markets theory for more on the
subject or maybe diversify your knowledge and watch all of our finance
videos food for thought and you know please click on the ads that we got to [Man holding begging sign]
eat around here
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