Typical investment strategies
From the perspective of a possible investment objective and taking the ability and willingness to take risks into consideration, the following typical investment strategies may be mentioned:
Investment strategy “Fixed Income”: Based on low ability and willingness to take risks only investments in first class, fixed interest investments bearing values with little price fluctuation are to be selected; investments in shares are excluded.
Such a strategy is recommended for investors who have to finance their living expenses from the return of their assets and thus mandatorily are dependent on preserving their capital.
Investment strategy “Income”: In addition to investing the bulk of the assets in fixed interest securities, a small minority of the portfolio can be invested in selected equities in order to increase income.
Such a slightly risky strategy is recommended for investors who have not only to live on the returns from assets but have an additional source of income (part time job, pension) which contributes to the daily living expenses.
Investment strategy “Balanced”: The portfolio comprises a share percentage of 40-50 %, depending on the market conditions.
Such an investment strategy holds a medium risk, which again depends on the quality of the shares. Such strategy only is to be recommended if the actual income is being secured otherwise.
Investment strategy “Growth”: The percentage of shares comprises 60-70%
Such an investment strategy holds a high risk: Investments in shares may result in total loss, therefore this strategy only is to be recommended, if the actual income is being secured in the long run and the investor readily may absorb a total loss of his assets.