Moderate investors want to increase the value
of their portfolios while protecting their assets from the risk
of major losses. They usually buffer the volatility of growth
investments, such as stock, with a substantial portion of their
portfolio allocated to produce regular income and preserve
principal.
For example, a moderate investor might use
an allocation model that has 60% in stock, 30% in bonds, and 10%
in
cash
equivalents.
While they will tend to favor blue chip and
other large-cap stocks, they may be willing to invest a modest
portion of their principal in higher risk securities — such
as international stock, small-caps, and volatile sector funds
— in order to increase their potential for higher returns.
If you’re not a risk taker by nature,
a moderate investing style may be suitable in any circumstance
or financial situation.
