QAEconomics › Which type of portfolio might a young investor who is not afraid of risk choose?
Q

Which type of portfolio might a young investor who is not afraid of risk choose?

A

Investments are good and come in a variety. Different people invest differently based on their income, age and so on. A young investor, particularly, with a high level of risk lenience will probably be after an aggressive investment strategy. This investment approach is founded on the idea that the investor doesn’t have concerns overtaking high risks to get high returns.

Young investors taking high risks are prepared to absorb a capital loss, should it happen, in their search for greater portfolio performance. They have high hope of capital appreciation and are not worried about conserving their capital. This gravitation towards such a strategy permits them to ride out unpleasant market conditions that may erode their principal.

With stock investments, there is a high risk of losing your entire investment should the company perform dismally. Investors will sell during such an eventuality and plummet the stock price. Selling means losing the initial capital. Therefore, a young investor who is not afraid of risk will choose a portfolio with a high percentage of stocks.

1 month ago
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