aggressive investor (2024)

What is an aggressive investor?

An aggressive investor actively looks for stocks with higher risk—but a chance for higher reward. Highly aggressive investors will often look for penny stocks in mineral exploration, new software, biotech and so on.

The most volatile sectors that aggressive investors typically seek out are the Resources and Manufacturing sectors.

An aggressive investor puts a large part of their portfolios in stocks (or ETFs) of less well-established companies without a history of earnings or dividends.

An aggressive investor sometimes gets higher returns for taking big risks, but must actively monitor the stocks they invest in. Because the stock market (and the aggressive stock itself) can be highly volatile, keeping a sharp eye on those stocks is a must.

Young aggressive investors, in particular, perceive that they can benefit from aggressive investing because they’re automatically given the advantage of time, as opposed to investors who have a shorter time left to invest. The amount of time that young investors have, they think, gives them room to stick out down periods in the stock market.

We suggest that even an aggressive investor should choose investments with as much underlying value and as many hidden assets as possible. This is the best way to cut risk, for conservative and aggressive investors alike. We recommend limiting your aggressive holdings to no more than about 30% of your overall portfolio. This is because aggressive stocks expose you to a greater risk of loss.

Use our three-part Successful Investor philosophy when investing in aggressive investments:

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

Discover how to put an extra strength in your portfolio with our specific advice on how to identify high-quality dividend stocks. It’s all in our report, Dividend Paying Stocks: How High Dividend Stocks Can Supercharge Your Income Investing. And it’s yours FREE!

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Investing in mining stocks? Follow these 20 Successful Investor tips

aggressive investor (1)

Here’s a stock tip: Successful investing in mining stocks, especially jr mining stocks, can be hard, especially in 2024 given volatile commodity prices. Still, the following 20 tips should help guide you to top miners regardless
When investing in mining stocks, you’ll find that they can… Read More

How much to invest in stocks—aggressive or conservative—depends on your risk level

aggressive investor (5)

Aggressive and conservative investors alike must assess a range of the risks when they consider how much to invest in stocks for their investment portfolios
Smart investors balance aggressive and conservative investments in their portfolio, in line with their investment objectives, and the market outlook. Above… Read More

aggressive investor (6)

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aggressive investor (2024)

FAQs

Is it good to be an aggressive investor? ›

Financial professionals usually don't recommend aggressive investing for anything but a small portion of a nest egg. And regardless of an investor's age, their risk tolerance will determine if they become an aggressive investor.

Should I set my 401k to aggressive? ›

If you need a lot of money for retirement or want to live an opulent lifestyle, you should invest more aggressively. If your needs are lower, you can afford to be less aggressive. Ability to save. If you have a strong ability to save money, then you can afford to take less risk and still meet your financial goals.

What is the average return on an aggressive portfolio? ›

While quite a few personal finance pundits have suggested that a stock investor can expect a 12% annual return, when you incorporate the impact of volatility and inflation, 7% is a more accurate historical estimate for an aggressive investor (someone primarily invested in stocks), and 5% would be more appropriate for ...

How aggressive should my Roth IRA be? ›

For the most part, it's advisable to take a buy-and-hold strategy in your Roth IRA. In other words, don't buy and sell investments often to seek a higher return. Choose investments that are suitable for your goals and hold onto them for many years. However, you will have to adjust your investments at some point.

What are the pros and cons of aggressive investing? ›

The main advantage of an aggressive investor is the potential for substantial returns, especially in rapidly growing markets. Conversely, a significant disadvantage is the high risk of losses due to the inherent volatility of aggressive investment choices.

How aggressive should my 401k be at $50? ›

Now, most financial advisors recommend that you have between five and six times your annual income in a 401(k) account or other retirement savings account by age 50. With continued growth over the rest of your working career, this amount should generally let you have enough in savings to retire comfortably by age 65.

What percentage of 401k should be aggressive? ›

As a rule of thumb, you can subtract your age from 110 or 100 to find the percentage of your portfolio that should be invested in equities; the rest should be in bonds. Using 110 will lead to a more aggressive portfolio; 100 will skew more conservative.

Is 90 stock too aggressive? ›

Generally, the 90/10 allocation is considered aggressive and is not suitable for conservative investors.

At what age should you invest aggressively? ›

Establishing Your Career: Ages 22–39

It's critical that you start saving for your long-term goals—especially retirement—as soon as possible. Younger investors can take full advantage of the power of compounding over several decades.

Is 7% annual return realistic? ›

In short, the average stock market return since the S&P 500's inception in 1926 through 2018 is approximately 10-11%. When adjusted for inflation, it's closer to about 7%. [Since we're talking citations in this post: Investopedia.]

Is 7% return on investment realistic? ›

General ROI: A positive ROI is generally considered good, with a normal ROI of 5-7% often seen as a reasonable expectation. However, a strong general ROI is something greater than 10%. Return on Stocks: On average, a ROI of 7% after inflation is often considered good, based on the historical returns of the market.

How much money do I need to invest to make $3,000 a month? ›

Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.

How to invest $100k at 70 years old? ›

Consider these options to grow $100,000 for retirement:
  1. Invest in stocks and stock funds.
  2. Consider indexed annuities.
  3. Leverage T-bills, bonds and savings accounts.
  4. Take advantage of 401(k) and IRA catch-up provisions.
  5. Extend your retirement age.
Nov 20, 2023

Should a 70 year old be in the stock market? ›

Conventional wisdom holds that when you hit your 70s, you should adjust your investment portfolio so it leans heavily toward low-risk bonds and cash accounts and away from higher-risk stocks and mutual funds. That strategy still has merit, according to many financial advisors.

What are the benefits of aggressive investing? ›

An aggressive investment strategy is a high-risk, high-reward approach to investing. Such a kind of strategy is appropriate for younger investors or those with higher risk tolerance. The focus of aggressive investing is capital appreciation instead of capital preservation or generating regular cash flows.

Should I invest more conservatively or aggressively? ›

By investing in a more conservative portfolio, you're choosing both lower risk and accepting that, in turn, your returns may be lower. If you choose a more conservative portfolio, you may experience smaller returns when markets perform well, compared to someone who invested more aggressively.

Should I invest aggressively in my 20s? ›

When you are in your 20s, explore your comfort level with taking a more aggressive approach and embracing risk. If you have a higher risk tolerance, you could be able to take bigger risks than you would if you were closer to retirement, though investors should consider their own individual circ*mstances.

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