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Not every one of us can take so much risk when it comes to investing. There are some people whose goal is to preserve their money or capital. Some can take a little loss from their money but others don’t care how much they will lose because they know they can take it back again in the long run.

There are three types of investor that you may look into to determine how much risk you can really take when you start investing.

Conservative Investor

These are the people who just want to preserve their money. They can’t tolerate the risk of losing their money so they just want to invest it in funds that are safe and conservative. These funds are mostly fixed income instruments which emphasizes stability while generating capital appreciation over time. Conservative investors mostly have short term investment horizon.

Funds where you can invest: bond fund, money market fund

Moderate Investor

On the other hand, there are those people that can tolerate the risk of losing money but minimalonly. They accept the volatility of the market because they know somehow that the capital growth cannot be achieved without some element of risk. That is why some of their money is invested in a high risk fund and some are with fixed income instruments that offer stability. Moderate investors have medium to long term investment horizon.

Funds where you can invest: balanced fund, target date funds

Aggressive Investor

Lastly, here are the investors that can tolerate losing their money in the market. They accept greater year-to-year volatility, as well as some moderate to strong fluctuations in the capital value of their investment. Their money is all invested in high risk funds. Aggressive investors also have long term investment horizon because they know, the returns of their investment can be realized over time.

Funds where you can invest: equity fund, index fund

Now, that you know the three types of investor, which one are you?

Are you the conservative one? Or you can tolerate a little risk like the moderate investor? Or maybe, you are the aggressive type of investor which is a high risk taker?

So before selecting the funds that you want to invest in, this is the first question that you should ask yourself because this determines the level of your risk tolerance.

Second question, what is your investment objective? Asking this specific question to yourself can motivate you to invest more and make it a habit.

Lastly, when do you need your money back? Every goal or objective should be time bound so that you can also focus to other things after your goal has achieved.

 

Hope this helps! Happy investing!

 

Your financial advisor for life,

Christine R. Caranyagan

PS. Protect your loved ones by securing yourself and their future. Choose a #brighterlife. Click here for more information.

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Christine Caranyagan, Licensed Financial Advisor

Sun Life of Canada Philippines, Inc.

My mission is to help fellow Filipino people to achieve lifetime financial security.

If you want to learn more about financial planning, I conduct it for FREE. Our office is located at 15F Frabelle Business Center 111 Rada Street, Legaspi Village Makati City.

Or you can just reach me thru this number: 0935 7368 619 or email me at christine.r.caranyagan@sunlife.com to set an appointment. You can also reach me through my personal Facebook account.

It will be my pleasure to be your Financial Advisor for Life. 😉

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