The Most Aggressive Ways to Invest for the Long-Term

Aggressive funds tend to be very volatile.

If you are an aggressive investor, you have a number of options at your disposal. Investing aggressively is more risky, but it can also provide you with a higher rate of return than you could get with a more conservative approach. Whether these aggressive investments are the heart of your portfolio or just a complement to a more conservative one, it is important to look at the relative merits of each option.

Individual Stocks

Investing in individual stocks can be much more risky than investing in mutual funds, since your money is concentrated in just a few companies rather than the hundreds you could get with a mutual fund. Even so, individual stocks can also provide you with a higher potential return, making them a good choice for aggressive investors who are also skilled stock pickers. Some investors choose to make mutual funds the heart of their portfolios and complrment those diversified investments with an assortment of individual stocks that they choose.

International Funds

International stocks and mutual funds are often more volatile than domestic stocks and funds, but they can also be more lucrative. You can choose to invest directly in the stocks of companies that do a majority of their business overseas. You can also choose international mutual funds, including both widely diversified overseas funds and mutual funds that invest in specific parts of the world and even in specific countries.

Sector Funds

If you want an aggressive investment, you can choose sector funds and participate in the growth of a particular segment of the economy. You can find sector funds that invest all their money in pharmaceuticals and biotechnology stocks, and you can make a solid profit if those segments perform better than the rest of the market. You can also choose other sector funds, including ones that invest heavily in energy, technology and other areas. Sector funds can be risky, however, since some segments of the economy will be down while others are up.

Aggressive Growth Funds

Aggressive growth mutual funds attempt to beat the market by looking for stocks that are undervalued and buying those stocks. These funds often buy and sell their shares many times throughout the year in an attempt to beat the market and generate positive returns. This high level of trading can result in a high level of capital gains, and that makes aggressive growth funds best suited for use in tax-deferred accounts like 401k plans and IRA accounts.

References

• The Motley Fool: Finding the Right Mutual Funds
• "Money Magazine"; Dipping Your Toe Into International Waters; Walter Updegrave; August 2009