Before you invest, make sure to consider your financial goals. Is your investment for the long-term? Will I be needing this money just in case an emergency happens? Also, take note that every investment involves risk. Invest only what you can afford to lose. By the time you know these two, you will now have a foundation for your future decisions.
As such, there are various types of investment approaches depending on the risk appetite and objectives of the investor. These are:
This type of mutual fund is mainly focused on fixed-income securities. These types of securities offer little to no risk, but in return, the returns from this type of mutual funds are also relatively smaller.
This approach to your mutual funds indicates that this said investment will be balanced. Investments are spread across from fixed income securities to high risk assets. Profits or expected returns from entering this type of investment are in the middle ground and steady, as its name suggests.
Aggressive investment means that investments are put to high-risk assets. Through this approach, there is greater income potential as profits are maximized. However, huge losses may come along with significant exposure, offering a higher risk of instability.
At the end of the day, there is no one investment that fits everyone. Take time to reflect, and choose the one that fits your financial goals, personality, and risk tolerance.