In most cases, a great financial planning consultant will encourage you to play a long game with your money and invest in financial products that will steadily accrue a modest amount of profit over many years.
Though people tend to think of financial planners as savvy, in-the-know investors that might change their investments as often as they change their socks, financial planning consultant Richard Cayne of Meyer International says differently. He calls himself a conservative investor that began in his teens. He sees amassing wealth as a marathon rather than a sprint. He and the other professionals at Meyer International most often suggest their clients to invest wisely and safely as opposed to playing a risky game with their money. After all, that’s what Cayne does with his own money.
You might wonder if it’s ever okay to take more risks and be more aggressive with your investments. It certainly is. Richard Cayne admits that there are some situations where more aggressive investing might be warranted to help you reach your goals.
Here are some ideas to ponder with regards to investing aggressively:
Consider Time Constraints
If you have a lot of time until you need the money you are investing, there’s no need to be aggressive but you can adopt an aggressive strategy if time is on your side. “Say, for example, that you are 30 and the money you are investing is for your retirement at age 60. In that case, does it really matter if you have invested in the US market and it drops by 10% this year. No, it doesn’t. Not if you don’t need the money for 20 years,” explained Richard Cayne.
On the other hand, if you have $1 million and you’re 55 and not quite sure it will fund your retirement – which it most likely won’t if you live in North America or Europe – then you are in the position to take more of a risk out of necessity but still need to protect on the downside.
Consider Your Risk Profile
There are plenty of things to consider when you think about your unique risk profile. For example, do you have family members depending on you? Do you have a spouse and kids depending on the money you are investing for future school fees or buying a home? Are you supporting elderly parents that are relying on this money for future nursing or other costs?
In these cases, you can’t really afford to take much risk if you need to be in a financial position to care for others. It does very much depend on your time horizon.
Or maybe the money is for your own retirement. Are these funds the entirety of your retirement savings or do you also have a pension, 401k, IRA or other source of retirement income?
If you have no one depending on you financially and if you have other sources of income should these investments not turn out as well as you hoped, then you are in a position to invest more aggressively.
Consider Your Personality
All investors are different. Some people can’t help checking on their investments daily and biting their nails to the quick if they have lost even small amounts. If you are one of these investors, you should probably not invest aggressively for the sake of your daily happiness and peace of mind.
Maybe you are one of those lucky types that can take a long view of investments and realize that the market will fluctuate and, if you don’t need to money anytime soon, it doesn’t matter. If you are this type of investor, maybe you have the heart – and stomach – for aggressive investing.
For further information about conservative versus aggressive investing and other investment topics, Richard Cayne and Meyer International can be reached at (+66) 02 611 2561
