An aggressive investment strategy is characterized by a high frequency and a substantial volume of financial transactions (buying and selling financial assets) within a short time frame, aimed at maximizing profit.
Signs of an aggressive strategy include:
- a high level of risk;
- pursuit of the highest possible returns;
- often characterized by simplicity, ease, and uniformity of actions.
Example of an aggressive strategy using mutual fund shares
The algorithm is as follows:
1. Find current and reliable information and study recent rankings.
2. Focus on the profitability demonstrated by the mutual fund. In other words, expenses, risk indicators, and others are not of interest.
3. Rank the mutual funds based on profitability over the previous 30 days in descending order.
4. Remove all closed-end and interval funds from the resulting list. Keep only open and mixed funds that have demonstrated the highest profitability over the past 30 days.
5. Next, rank the top 10 funds based on income over the last 365 days. Then, select the 3 LEAST profitable funds; these will be the primary focus of investment activity. The reason is that funds with lower income over the past year are likely on an upward trajectory and have a higher probability of yielding good profits. Conversely, choosing the fund with the highest income over the past year may indicate it has exhausted its potential and may not be able to show sharp and substantial growth or, worse, might soon decline.
It’s advisable to divide the allocated investment budget into 3 equal parts and invest across 3 different avenues accordingly. Sometimes the budget is divided into 2 parts, or the entire sum is invested in a single most profitable fund.
Share of Capital
It is important to remember that the basis for investments in mutual funds or ETFs should always be a fundamental strategy. An aggressive strategy is recommended only for 'experimental' finances (half of the profit from the previous working year).
Experts advise against using funds from the main deposit for aggressive strategies, and even more so—not to invest all available funds at once.
Interval Mutual Funds
Interval systems provide substantial opportunities for risky investments and, consequently, can yield significant returns. Open-end funds do not have this advantage. However, it is preferable to invest the "experimental portion" of the budget; doing so once a year is often more convenient.
