Learn about the characteristics of conservative, moderate, and aggressive investors
Each investor has peculiarities, which define his profile in the way of thinking and acting when making his investments
Source: Genial Investimentos
One of the markets in which we can see a growing trend is in the investment market. We realize that investing is the best way to raise capital and plan for the future in a more assured way. One of the incentive points is the facility that technology has been offering to those who are interested in investing. Consequently there are different profiles of investors in which people fit. We describe below the line of thinking and strategies used by each of these investor types, where you can find out which of the three groups you are a part of.
The conservative investor is one who preserves his resources and does not take risks that compromise his equity, losses and lack of liquidity are always out of his plans. Most are beginning investors, who avoid risks and have short and medium term objectives. Therefore, conservative investments are low risk, stable, positive and almost do not fluctuate. They are fixed income investments, so the receipt will always be on the agreed term. The investor may dispose of this type of investment at any time by means of a sale or redemption, even if before an eventual maturity date. Therefore, the income does not become negative or with resources “stuck” to an expiration date. The most sought after investments by conservatives are conservative fixed income funds, such as DI funds, Treasury Direct, Bank Deposit Certificates (CDB), Real Estate Credit Letters (LCI) and Agribusiness Credit Letters (LCA). The conservative investor in most cases has short and medium term goals such as emergency reserve, travel savings, reservation to pay for a wedding party or an overseas course that should happen within no time.
On the other hand, the moderate investor, who takes a slightly higher risk, is looking for a return that is higher than the market average. You are aware that assuming a slightly higher risk, you can achieve profitability above the market average. It invests in fixed income, stocks and multimarket funds, always in search of security. It also balances fixed income, with stocks and multimarket funds.
These investors tolerate some risk, but they also cherish their equity. They know the market a little better and diversify their objectives between short, medium and long term. They can allocate part of the assets to assets with greater volatility and lower liquidity. Their investments have a slightly higher risk than conservative investments, but, as a result, they are able to yield slightly above the Selic and the CDI. It may make it impossible to redeem or sell before a certain period.
Eventually, moderate investments can have negative returns depending on the economy and when the investor makes redemptions or sales. The most sought after investments by the moderate investor are multi-market funds, debentures, stocks, stock funds, stock leases, real estate funds, cryptocurrencies, trade, robot and Financial Letters. The objectives indicated for this investor profile are: travel, courses, wedding party, the birth of a child, the purchase of a car or a property; medium and long-term goals such as the retirement or college of children who are still young; or just to make the estate grow.
The third type of investor is the aggressive. This is the highest risk investor because it seeks the highest possible profitability. As it has more experience in this market, it understands that the daily oscillations balance in the medium and long term. These investors have a higher percentage of the wallet in variable income than moderate investors and prioritize the return on investment. Its repertoire in the investment market, brings enough confidence to make decisions with more daring and freedom. This more relaxed thinking, makes the aggressive investor also opt for investments in cryptocurrencies, trade and robot. The aggressive investor is not only investing in higher risk investments, but it is the higher risk yields that provide greater profitability and consequently the possibility of yielding well above the basic interest rate. In return your losses can be large or unlimited. Your returns can also be very volatile, both up and down. In addition to being influenced by the performance of the economy and companies. Certain aggressive investments are characterized by leverage. A mechanism that enables the investor to operate financial volumes greater than his own equity and even volumes considered large, with only a fraction of the resources. The objectives that most fit in this profile are the medium and long term, such as retirement or financial independence, or to increase the equity.
Regardless of the type of profile, it is clear that the market and its myriad possibilities are growing. That is why it is important to always be aware of the new investment possibilities, so that you can increase your earnings, take advantage of new opportunities and prepare for the future.
