| What kind of investor are you - cautious or | | | | investments - they do however want better returns |
| aggressive, balanced or defensive? | | | | than what would usually be available through a High |
| Whether you are investing as part of a pension plan, | | | | Street deposit account. A cautious portfolio might |
| investment ISA or simply buying stocks and shares, | | | | include some exposure to shares. |
| it's vital that you have a 'plan of attack' to help guide | | | | Balanced Investors |
| your investment - an investment strategy in other | | | | A balanced investor is likely to have a portfolio that is |
| words. | | | | exposed to some degree of risk - say through |
| But what makes a sound investment strategy? | | | | individual stocks and shares - but is unlikely to |
| Good investments balance the risks associated with | | | | fluctuate wildly in any given year. |
| investing with the potential rewards gained from | | | | Aggressive Investors |
| investing. How you choose to balance that risk will | | | | An aggressive investor is prepared to take bigger |
| often determine the kinds of investments that are | | | | risks in return for potentially bigger rewards. They will |
| suitable to your own needs. | | | | be prepared for large fluctuations in the performance |
| If you have a high tolerance for risk - and are hungry | | | | of their portfolios over a short period of time. |
| for the big rewards - you may consider yourself a | | | | Of course, you could just as easily be a very |
| more aggressive investor. Someone nearing | | | | defensive investor or a moderately aggressive |
| retirement on the other hand may take a more | | | | investor - there are of course, no fixed definitions. |
| defensive or cautious approach to help ensure a | | | | The first question is, "what do you want to achieve |
| viable annual income in retirement. | | | | with your investments?" If you want to see big |
| Defensive Investors | | | | returns quickly, you'll need to be prepared to be |
| Defensive investors are concerned with maintaining | | | | more aggressive in your investments. |
| the value of their investments over time - i.e. not | | | | The second question is, naturally enough, "what is |
| losing. As a consequence a defensive investment | | | | your appetite for risk?" Would you be prepared to |
| portfolio might include lower risk investments like | | | | lose money, and what would be the ramifications if |
| commercial property and high quality bonds with | | | | your investments did lose value? |
| returns similar in nature to high-interest High Street | | | | Whatever your goals or your risk profile, there is an |
| deposit accounts. | | | | investment strategy to suit your needs. Speak with |
| Cautious Investors | | | | your independent financial adviser and they should be |
| Like defensive investors, cautious investors are not | | | | able to help you develop a strategy and portfolio to |
| looking for the big gains associated with higher risk | | | | meet your needs. |