What Is a Conservative Investor?

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A conservative investor is someone who doesn't subject themselves to much market risk or market fluctuation. Typically an older person, conservative investors will have more fixed income bonds and fewer stocks. Find out more about conservative investing with information from a financial planner in this free video on investments.

Part of the Video Series: Investment Facts
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Video Transcript

Hi, there. I'm Cathy Pareto, the founder of Cathy Pareto and Associates, certified financial planner, here in Miami, Florida. In this clip, we're going to talk about what is a conservative investor? Well, the truth is, that means a lot of different things to different people, but the way I understand it would be a conservative investor is someone who maybe doesn't want to subject themselves to too much market risk or market fluctuations. Investments go up, investments go down. Typically, the more stocks you have, the more fluctuations you have. That's fine for an aggressive investor. But a conservative investor is typically an older person who maybe cannot take the same amount of risk as a young person, maybe relies on that money for retirement income. And so a conservative investor should minimize the amount of stocks they have in their portfolios and increase the amount of fixed income or bonds they have in their portfolios, and that's one of the ways that you can control the volatility of that account or how much it fluctuates up and down. So if you're approaching retirement, you want to seriously think about adding more fixed income or bonds into your portfolio and less stocks because the more stocks you have, the more fluctuations you'll incur. Or if you're just a nervous person who can't stand the thought of your portfolio going down, that makes you a conservative investor whatever age you are. So that's a little bit about what a conservative investor is, and this has been Cathy Pareto in Miami, Florida.

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