What is an aggressive investment portfolio?
An aggressive portfolio seeks outsized gains and accepts the outsized risks that go with them. 1. Stocks for this kind of portfolio typically have a high beta, or sensitivity to the overall market. High beta stocks experience greater fluctuations in price than the overall market.
It is often considered an enticing, albeit high-stakes, game piece in the extensive chessboard of the financial markets. An aggressive growth portfolio is a collection of high-risk investments that focuses on capital appreciation as its primary asset acquisition priority.
An aggressive investor wants to maximize returns by taking on a relatively high exposure to risk. As a result, an aggressive investor focuses on capital appreciation instead of creating a stream of income or a financial safety net.
An aggressive stock is a higher-risk investment that can potentially produce higher returns than more conservative stocks, but also has equal potential for bigger losses. Examples of aggressive stocks would include junior mining stocks, smaller technology stocks, and penny stocks.
| Category | Active-Based Aggressive Portfolio | Benchmark |
|---|---|---|
| 3 years | 6.27% | 5.77% |
| 5 years | 9.32% | 9.30% |
| 10 years | 7.90% | 8.07% |
| Since inception | 9.55% | 9.47% |
While being more aggressive can make a lot of sense if you have a long time until retirement, it can really sink you financially if you need the money in less than five years. To reduce risk, investors can add more bond funds to their portfolio or even hold some CDs.
The younger you are, the more aggressive your investments should be. If you are 30, put 30% of your money in low-risk, low-interest investments like money market accounts and government securities, and 70% in stocks, or stock funds, that offer a higher rate of return.
For example, Portfolio A which has an asset allocation of 75% equities, 15% fixed income, and 10% commodities would be considered quite aggressive, since 85% of the portfolio is weighted to equities and commodities.
- Meeder Dynamic Allocation Fund.
- JPMorgan Investor Growth Fund.
- TIAA-CREF Lifestyle Aggressive Gr Fund.
- Franklin Mutual Shares Fund.
- North Square Multi Strategy Fd.
- Gabelli Focused Growth and Inc Fd.
- E-Valuator Agrsv Growth(85%-99%)RMS Fund.
| TH | Target Hospitality | $15.28 |
|---|---|---|
| ARHS | Arhaus | $14.24 |
| ASRT | Assertio Holdings | $6.09 |
| SHLS | Shoals Technologies Group | $25.67 |
| DRCT | Direct Digital Holdings | $4.59 |
How do you make an aggressive portfolio?
Generally, the more risk you can bear, the more aggressive your portfolio will be, devoting a larger portion to equities and less to bonds and other fixed-income securities. Conversely, the less risk you can assume, the more conservative your portfolio will be.
- JD.com Inc. (ticker: JD)
- ClearPoint Neuro Inc. (CLPT)
- Albemarle Corp. (ALB)
- Controladora Vuela Compañía de Aviación SAB de CV (VLRS)
- Nice Ltd. (NICE)
- Bank of Hawaii Corp. (BOH)
To the degree you can stand it, you should usually be as aggressive as possible with your 401(k) allocation, and your investments generally. There are those who are really uncomfortable with investing aggressively, even when they're young.
- High-yield savings accounts.
- Money market funds.
- Short-term certificates of deposit.
- Series I savings bonds.
- Treasury bills, notes, bonds and TIPS.
- Corporate bonds.
- Dividend-paying stocks.
- Preferred stocks.
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.
Basically, the rule says real estate investors should pay no more than 70% of a property's after-repair value (ARV) minus the cost of the repairs necessary to renovate the home. The ARV of a property is the amount a home could sell for after flippers renovate it.
An aggressive portfolio may suit investors who feel they can handle a few bear markets in exchange for the possibility of overall higher returns. Or, they may appeal to those who feel comfortable holding onto their investments.
The Rule of 120 (previously known as the Rule of 100) says that subtracting your age from 120 will give you an idea of the weight percentage for equities in your portfolio.
At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).
£300k in a pension isn't a huge amount to retire on at the fairly young age of 60, but it's possible for certain lifestyles depending on how your pension fund performs while you're retired and how much you need to live on.
Is $100,000 in retirement at 30 good?
Based on the median income for Americans in this age bracket, $100K between 25-30 years old is pretty good; but you would need to increase your savings to reach your age 40 benchmark.” “The current level of your income makes a big difference in determining if you're on track for retirement,” added Cox.
Recent data from Northwestern Mutual shows that the average 30-something has $67,400 saved for retirement. So if you're sitting on a $100,000 savings balance at age 30, it means you're ahead of the game.
A standard example of an aggressive strategy compared to a conservative strategy would be the 80/20 portfolio compared to a 60/40 portfolio. An 80/20 portfolio allocates 80% of the wealth to equities and 20% to bonds compared to a 60/40 portfolio, which allocates 60% and 40%, respectively.
| Aggressive investor | Conservative investor | |
|---|---|---|
| Risk tolerance | High | Low |
| Investment objective | Aggressive growth | High income and some growth |
| Time horizon | 15+ years | 3 – 5 years |
| Sample asset allocation | 95% stocks, 5% cash | 20% stocks, 50% bonds, 30% cash |
An aggressive portfolio is ideal for someone with high risk tolerance and a lot of time to invest, while a conservative portfolio is better for someone with low risk tolerance and a short amount of time. A model portfolio doesn't necessarily make it the right portfolio for you.
