To define each person’s profile when investing, financial institutions usually apply questionnaires that include questions about income, equity, market knowledge, and short, medium, and long-term strategic objectives. In general, the bold investor is the one who is willing to take more risks and, consequently, also has chances of obtaining greater returns.
That is, the greater the exposure to risk that someone is willing to have, the bolder their profile. Check out, below, the profile of the bold investor and which are the ideal investments for him!
What characterizes a bold investor?
Usually, this investor is a person who already has a calm financial life and, therefore, can take more risks. However, this is not his only condition. Discover the five main features!
1. Take risks in search of high returns
One of the attributes most noticed in investors classified as aggressive or bold is that they take greater risks, as they expect high returns. That is, the focus of these people is to obtain the best possible return to make their wealth grow.
2. Has a higher percentage of the portfolio in variable income
Another very common characteristic is that he has a considerable percentage of his portfolio invested in variable income — thus prioritizing the profitability of the investment.
However, even bold investors should have a portion of their investments allocated to more conservative options. They serve to form an emergency reserve with good liquidity and meet its short-term objectives.
3. Focus on the long term
The objectives of the investor with this profile are mainly long-term. Therefore, your portfolio may be subject to volatility during the investment period.
4. Takes calculated risks
Despite having an appetite for risky investments, the bold investor is fully aware of the alternatives he chooses and takes only calculated risks, making sure that they are in line with his long-term planning. In other words, it is not because they can risk a little more than this person will put their money in applications of dubious origin.
5. Keep calm
This investor is cold-blooded in the face of market fluctuations, dealing more calmly with the risks of his applications. He knows that his portfolio balance will fluctuate in the short and medium-term and may reach lower levels.
However, his focus is on the long term. Therefore, this investor is not afraid of temporary losses and aims at long-term consistency that will bring greater returns.
What are the ideal investments for the bold investor?
As you may already know, the boldest and most aggressive investments are also the riskiest. At the same time, they tend to have a greater potential for profitability, being able to yield considerably above the basic interest rate of the economy.
However, it is worth noting that the losses can be large — or even unlimited. This is because the volatility of these options is usually high. That is, returns can fluctuate greatly, both up and down.
Equity investments fall into this category, which means that the return is conditioned to elements such as the performance of organizations and the economy itself, for example. We list below some suitable investments for the bold investor.
real estate funds
Real estate funds allow the investor to join groups of people who invest resources in real estate developments, proving that owning a property is unnecessary to receive rental values.
The operation of the securities fund is like a kind of condominium in which the investor owns a quota and receives payments according to his participation.
In addition to leasing, it is still possible to earn returns from property sales, leasing, and other real estate activities. The fund’s assets may consist of one or more properties, part of properties, and rights related to them.
It is quite common for the fund to buy real estate – which may even be a shopping mall – and receive income from their rental and take advantage of the appreciation of the assets. The remuneration of each fund varies according to the option chosen.
The most common risk associated with these investments is that the properties will not be rented or sold, resulting in lower returns during certain periods. In addition, there is also the risk that the investor will sell a share for a price below the purchase price.
Actions
Well known by the market, a share works like a share in a company. When a company is classified as publicly traded, its equity is divided into several “pieces,” called papers or shares.
The shares are sold to investors, who become owners of a part of that company. As their remuneration is not known at the time of purchase, the shares are considered variable income investments. For this reason, the stock market can generate small profits or losses while bringing significant results (positive or negative).
In general, equity funds seek to balance different companies’ roles precisely to reduce risks and seek more predictable returns. Even so, variable income investments present more risks since it is not possible to know the exact yield at the time of hiring.
hedge funds
As its name suggests, a hedge fund has the freedom to operate under different assets, such as company shares, fixed income securities, derivatives, currencies, and investments abroad. This flexibility allows the fund manager to assemble different strategies that fit according to changes in the financial market or economical scenario, for example.
The versatility of hedge funds allows these investments to overcome even moments of strong volatility. Therefore, the freedom of fund management can provide both a more attractive return and a high level of risk.
Due to their great flexibility, these applications are the biggest wild cards in the industry and can be more conservative or more aggressive, depending on the strategy adopted by the fund’s management and investors — since each strategy has different rules for carrying out operations.
As we have seen, the bold investor is someone who is willing to take more risks to obtain greater returns. However, he also values planning, always seeking to take risks prudently and calculatedly. His focus is on the long term, so it’s important that he stay calm during yield swings.
Knowing how to choose properly, the bold investor has at his disposal a series of great assets through which he can fulfill his dreams and reach his most daring financial goals.
If you are interested in knowing how to build a balanced portfolio according to your goals, contact us. We have a team of experts dedicated to bringing you the best opportunities according to your investor profile.
