Finding a great investment strategy is probably the biggest challenge every investor have ever faced. As you may see, the investment strategy must be adjusted to the condition of the market and the economy at the moment. Therefore, we often find investors changing their investment strategy in order to gain the most benefit from the economy condition.
There are three basic investment strategies which then can be developed into hundreds styles and variations. The first one of these strategies is the conservative strategy. This is the most suitable strategy for those who are still new in investment business or those who are afraid to take risk. Conservative investment includes investment in bonds, certificate of deposit, and bond funds.
Since the risk is very low, the potential of getting high returns for these investments are also low. However, this is the best investment strategy if you just want to do something with your money and get a steady return from it.
The second strategy is the moderate strategy. The returns offered by this strategy is particularly higher than the conservative strategy. However, the risk is of course also higher than the conservative strategy. Moderate investment basically includes mix of every things mentioned here. Mutual funds, individual stocks, money market, or bonds.
The last and the most risky strategy is the aggressive strategy. Aggressive strategy has the nature of high returns, but also as the consequence has a very high risk. The general pattern of aggressive strategy is usually 70%-80% stocks and 20-30% bonds. Still, there are people who thinks that 80% stock is still moderate and go for 90% stock for an aggressive strategy.
In the end, you have to choose which investment strategy is the most suitable for you.