Types of Investing

Active Investing

Types of Investors

These investors use the passive investing approach and want minimal effort, research and monitoring of their investments. Water, gas and electric utilities are examples of defensive stocks because people need them during all phases of the business cycle.

Examples of Defensive Stocks include:

• Fedex
• Qualcomm
• Microsoft

Conservative

These investors build a stock portfolio with the goal of achieving steady returns, including dividends, while maintaining a lower level of risk.

Examples of Conservative Stocks include:

• Procter and Gamble
• Pepsi
• McDonald’s

Balanced

The goal of these investors is to achieve a balance of security, income and growth. Balanced investors look to invest around 50% in growth assets (equities and property) and the remainder in defensive assets (cash and fixed income).

Examples of Balanced Stocks include:

• Procter and Gamble
• Pepsi
• McDonald’s

Growth

These investors are focused on capital appreciation and look at earnings growth, profit margins, returns on equity and share price performance. Growth investors try to increase their wealth through a long or short-term capital appreciation.  

Examples of Growth Stocks include:

• Amazon
• Tesla
• Netflix

Aggressive

These investors have stocks and ETFs of companies who do not have a history of earnings or dividends. These investors are known for taking big risks and actively monitoring the stocks they invest in.

Examples of Aggressive Stocks include:

• Roku
• Intelligent Systems
• ACM Research

Growth and aggressive investors will typically use active investing because of the amount of research and monitoring that goes into picking these types of stocks.

Defensive, conservative and balanced investors will typically use passive investing because those stocks have the ability to be invested in and left for years, without having to be monitored.