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Definition: Aggressive Investment Strategy
This strategy is based on the high risk-high return principle and is a portfolio management strategy focused on capital appreciation as primary goal and not income returns. Even though age is not a criteria but generally, younger investors are more suitable for this due to their longer investment time horizon and more ability to bear shocks in stock markets.
Portfolio focused on aggressive investment strategy are more focused on investing in riskier asset classes such as equities and commodities rather than on fixed income. Even within equities, small cap stocks focused portfolio is considered more aggressive then corresponding blue chip or mid cap portfolio.
This strategy requires more active management than other similar portfolios and requires frequent adjustment to weights in the portfolio due to high volatility to maintain allocations to target levels. This type of investment strategy is not suited for long term since the investment is more in riskier assets and the trading happens mainly on volatility. Such strategies have been hallmark of fund managers like Stephen Covey who invested in high growth-high risk companies to earn above market rates of returns.
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