What kind of investor are you - aggressive, passive or conservative?
January 13, 2014 / Written by Rich Harvey
Every investor is different, but the strategy you use can often be grouped under a specific type of investment behaviour.
For instance, most investors can be thought of as aggressive, passive or conservative.
Aggressive investment is all about achieving maximum return. This type of investment strategy means attempting to grow profit at an above-average rate, and doing everything possible to ensure high returns.
When it comes to buying investment property, this typically means having a low allocation of more stable income properties and a higher allocation of more growth-oriented properties. This can be based on buying in areas that are seeing exponential value growth, and utilising variable-rate finance to maximise the investment while minimising costs.
Of course, this kind of strategy also comes with increased risks, as aggressive investment can leave you open to more potential loss.
Passive investment means reaping the rewards of investment while minimising the maintenance required.
Property buyers who purchase a home and hold onto it with long-term goals in mind can usually be thought of as passive investors. This approach requires extensive research, as well as patience, but can pay off big down the line.
By focusing on appreciation and taking a more detached approach, passive investors can reduce the stress, expense and time-consumption that comes with other types of property investment strategies.
Conservative investment can be thought of as safety oriented. Conservative investors will focus on low-risk options in order to protect themselves from financial loss.
While this strategy may not result in immediate or extra-large returns in the property market, it can suit the needs of investors who are looking to diversify their portfolios without exposing themselves to extra risk.
Regardless of the strategy chosen, it can pay off to have an experienced buyers agent available to provide expert advice regarding how different properties, as well as the areas in which they're located, may influence an investment strategy.