| Balanced investment strategy is perhaps the | | | | Defensive investors look for long-term profits and |
| most followed and successful investment | | | | or monthly earnings. Advantages of defensive |
| strategy for portfolio management. Its primary | | | | investment strategy include reduced risk, |
| aim is to keep a balance between investment risk | | | | predictable income, better investment planning and |
| and return. A balanced investment strategy | | | | diversification of portfolio. This strategy mainly |
| combines the merit of aggressive and defensive | | | | suits beginners. Disadvantages include low return |
| investing strategies. | | | | from investments and requirement of high capital |
| Aggressive investment strategy involves investing | | | | investments. |
| in high return high risk investments with the sole | | | | In balanced investment strategy, the investor |
| purpose of maximizing return from investments. | | | | tries to keep a balance between his aggressive |
| It involves allocating major portion of portfolio | | | | and defensive behaviors. It involves balancing of |
| capital to invest in equities, equity based funds and | | | | both return and risk by diversifying investments in |
| highly volatile markets. Investors following | | | | both high return high risk and low return low risk |
| aggressive investment strategy often look for | | | | investments. Balanced investors often follow a |
| comparatively short-term profiting and wish to | | | | portfolio capital allocation rule telling how much to |
| invest more in growth stocks, and small caps and | | | | invest in equities and bonds and how much to |
| mid cap stocks. Advantages of aggressive | | | | invest in treasury notes, precious metals and |
| investing include quick profit, high return over | | | | funds. Usually one portion of portfolio is actively |
| investment and no need of large portfolio capital. | | | | managed and other portion is left to grow |
| It can work really well for experienced investors | | | | automatically. Balanced investment strategy can |
| and investors who are very strict in their money | | | | be slightly aggressive or slightly defensive with |
| management. Disadvantages include high risk, high | | | | respect to investments made. |
| volatility in total portfolio value and no surety of | | | | The greatest advantage of balanced investment |
| profit. It less supports novice investors and | | | | strategy is the diversification of portfolio and |
| investor looking for monthly earnings or living | | | | hedging against high total portfolio value volatility. |
| costs. | | | | It is good for investors looking for medium-term |
| Defensive investment strategy is just opposite of | | | | (3 to 5 years) profits. Other advantages include |
| aggressive investment; it’s purpose is to | | | | flexibility in portfolio management, better results |
| preserve the capital and ensure some return | | | | with better capital investments, (almost) |
| from investments. It involves investing in low | | | | predictable income and manageable portfolio risk. |
| profit low risk investments like bonds, money | | | | Balanced investment strategy support both |
| market funds, treasury notes, and equities with | | | | beginners and experienced investors and can be |
| minimum price volatility and good dividends. | | | | an option for monthly earnings for living. |