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Choose Your Investment Style

You can invest wisely if you know what your risk tolerance level is and what your investment style is. There are three investment styles which tie you up with the tolerance limits. These are the conservative, moderate and the aggressive.

If you have low risk tolerance level you most probably will invest in those projects which follow the conservative or moderate style of investment. But if you can bear high risk tolerance you would be following the moderate and aggressive style of investment. Your financial goals will also play a role in deciding the style of investment you will follow.

If the purpose of your investing is to buy a home in next two or three years you would probably invest in aggressive style of investment. But if the purpose is to save money for the retirement purpose you must be planning to grow your money in secure way. In this case you would adopt the conservative or moderate style of investment.

The conservative investors always want to invest in that investment option from which they can recover their initial investment. Suppose they have invested $5000 in that case they will be wishing to recover at least $5000 back. Conservative investors usually make their investments in bonds, common stock and short term money market accounts. An interest bearing saving account is always their first choice.

Portfolio Performance Measurement and Benchmarking, Chapter 32: Determining Investment Style 

The moderate investors tend to follow the same characteristics as the conservative investors have. But they only difference is that they invest their half amount in the high risky projects and other half in safe investment options like conservative investors.

The aggressive investors are those who always want to invest their money in the high risky projects. They always choose those ventures which have higher amount of return as well as higher amount if risk. They invest in both the short term and the long term projects. They usually invest their money in the stock market in order to gain more returns.

Infrastructure as an Asset Class: Investment Strategy, Project Finance and PPP (Wiley Finance) 

No matter in which style you invest your money to fulfill your financial goals, but the crucial thing is to select the projects carefully under your risk tolerance zone. What so ever the investment project may be, but you should only invest in that project by knowing the every fact about it. It will ensure the safest investment.

Investment Styles, Market Anomalies and Global Stock Selection (Research Foundation of AIMR and Blackwell Series in Finance) 

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