Aggressive investors concentrate on investments
that have the potential for significant growth. They are willing
to take the risk of losing some of their principal, with the expectation
that they will realize greater returns.
Aggressive investors might allocate from
75 to 95% of their portfolios to individual stocks and stock mutual
funds. While large- and small-cap stocks and funds may make up
the core of their portfolios, many aggressive investors will have
significant holdings in more speculative stocks and funds, such
as emerging market and sector mutual funds.
Seeking growth
Since aggressive investors focus on growth,
they are usually less inclined to hold income-producing securities,
such as bonds. However, they may take modest positions in bonds
to lower the volatility of the their portfolios. Aggressive investors
may also keep a portion of their assets allocated to short-term
cash
equivalents as a holding place for their cash between
other investments.
An aggressive investing style is definitely
not for the faint of heart. It’s best suited for investors
with a long-term investing horizon of 15 years or more, who are
willing to make a long-term commitment to the stocks they buy.
But history has shown that an aggressive investing approach, combined
with a well
diversified
portfolio, and the patience to stick to a long-term
buy-and-hold
investing strategy through inevitable market downturns, can be
the most profitable in the long run.
