Aggressive risk cutting

Article Excerpt

Aggressive investments should make up no more than, say, 30% of your portfolio. You can cut your risk all the more by taking a conservative approach to your aggressive holdings. To start, your aggressive portfolio should still reflect our three-pronged Successful Investor wealth-building philosophy. That is, invest mainly in well-established companies; spread your money out across most if not all of the five main economic sectors (Manufacturing, Resources, Consumer, Finance, Utilities); downplay stocks that are in the broker/public relations limelight. You may stretch these rules a little, while still sticking to the general idea. You may invest in more companies that are less well-established, compared to a conservative investor. But avoid loading up on penny stocks, recent new issues, or any stocks that expose you to a serious risk of total loss. You may invest more heavily in Manufacturing and Resources, the two riskiest sectors. If so, take care to spread your money out across the many industries within each of these sectors…