What does this mean? It’s simple: how to love or reject the risk. To their luck, this task is not to make yourself. Most banks, brokerage firms and mutual fund managers can help.
One of the first recommendations of any stock or investment advisory to determine your investor profile. What does this mean? It’s simple: how to decline or the risk of loving you. To your wealth, this task does not need to do it themselves. Most banks, brokerage firms and mutual fund managers can help. Indeed, it is an internal requirement to introduce a previous plan.
There are three traditional classifications:
Conservative
Whether you choose not to risk and want to promote safety? So this is your category. Perhaps, your advisory will provide fixed income instruments the role of government, or deposits? For example? Even if it means sacrificing the profitability of your investment. Portfolio standard: 70% of capital funds in the debt stock of 10% equities and 20% in hedge funds.
Moderate
This profile combines a good evaluation of the safety of fixed income, some equity instruments cones (such as stocks, for example). It’s dangerous properties, but is willing to go further to improve profitability, conservative investment. Bags portfolio standard of 20%, 60% debt and 20% in the fund monthly or bimonthly.
Aggressive
If you are looking for outstanding performance and are willing to take risks if the goal is to get better results, this is your profile. But beware: for the love of risk does not mean putting your money anywhere. Even the greatest Paris can be controlled. Portfolio standard: 40% of stocks (such as long-term), 40% equity and 20% debt financing in foreign currency.
The next step is to design a plan that fits your “financial personality.” Remember that the higher risk, high return and low risk, low yield. It is therefore important that you know if you’re willing to risk or prefer a more conservative portfolio.
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