Difference Between Aggressive and Defensive Investor

  • 4 November 2016 | 1840 Views | By Mint2Save
Investor Types

Investment is a very dynamic term. It finds its way from moral and ethical values to real estate and equity. When it comes to finance, investment restricts itself to the goals. Investors are first made to decide the goal which they intend to fulfil and post that, a strategy is developed. Investments are grouped into short, medium and long terms based on the goals one needs to pursue.

In order to achieve this goal based investment, investors are also categorized into two types depending on how involved they want to be in their finances. The categories are:

(a) Aggressive Investor, and (b) Defensive or Passive Investor.

In this article, we are going to discuss what makes an investor aggressive or defensive and the traits of these two types of characters.

Let’s Begin With Passive Investors!

Passive or defensive investors are those who seek to stay invested in one product for the period defined. This means that they do not like to shuffle up quickly between the products and do give a product sufficient amount of time to nurture their investments.

These investors are usually laid back and do not expect more than the anticipated returns from their investments.  A common example of defensive investors is the young working class generation, which is paid sufficiently and seeks for a method where investment can be made once and doesn’t require repetitive decision making thinking.

Long term investments in SIP, recurring deposits, tax saving plans, property purchases via loans etc. are  a few investments the defensive investors tend to choose from. Since they seek more of a consistency in a return, these investors are seemingly more comfortable with investment in Moneyback, endowment and other ULIP based life insurance products. When a financial advisor consults a defensive investor, he relies on the past performance of funds.

Aggressive Investors are those who do not just invest and sit back to see their investments grow. A major portion of aggressive investors is formed by those who intend to make out a living from the investments. Most short term investments do come from the aggressive investors.

Aggressive investors do not rely on the past results and are more enthusiastic towards the future. Not just limited to one type investment or restricted by a minimum investment period, aggressive investors are the reason that has created many investment advisors as well as media houses.

This category of investors is far more practical. They do bet on big deals, new products, and, hence, are obviously more aligned towards risk. For being closer to risk, aggressive investors also fetch more returns than a normal passive investor.

Being more return oriented, aggressive investors tend to refrain from amalgamated investment products such as ULIP based life insurance policies.

Most common investments among these investors would be real estate, equity, mutual funds, IPOs and gold. The richer lot of investors even goes ahead with startups and high revenue promising scripts.

Aggressive and Passive investors are to be understood as two separate characteristics, which can be shown by single investor at various stages of his life.

These ideologies do vary from investment to investment and

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