Also, choosing familiar companies stocks, like Walgreen, GE and Wal-Mart, can help ease the fear of losing your money. Moderate investors are usually willing to take on more risk, but place a small percentage into low-return investments. This investment temperament is best for those who will retire within 10 to 25 years. The major obstacle is if they become too complacent or afraid to re-evaluate their investments. This can result in staying in an investment that is doing poorly, year after year.
Aggressive investors are willing to take great risks in order to receive the highest return.
This investment type is best for young adults, since retirement is far into the future. Greed can become a problem, since greater risk can lead to much greater loss. Stock market timing, commercial gimmicks, hot stock tips, unknown companies, the futures market, and a host of other shaky strategies can mean trouble. Another way is using aggressive growth or international mutual funds. No matter your investment tolerance, you should never place all of your money into one stock or type of business.