The most important thing to you as an investor is your portfolio — the range of assets held within your stock-broking or investing account. Learn how to diversify your portfolio and reduce your risk by reading through this handy Cheat Sheet. Get tips on a range of asset classes and investment strategies and achieve positive returns in any market.

Deciding What Kind of Investor You Are

Investors come in many forms. In very general terms, there are the low-risk, very cautious investors and then there are the higher risk and more adventurous investors. See which category you fall into as an investor and what your drives and expectations are when it comes to your investment portfolio.

Here are some strategies that characterise the average lower-risk investor:

Absolute returns: Even low-risk investors like to think that they can make a positive return, which explains why so many are attracted to the idea of absolute returns; that is, making money in all markets, whether those markets are rising or falling in value.

Bonds: Bonds are likely to be a favourite in terms of asset classes, simply because they tend to be less volatile and produce income. Crucially, the promise to repay thats implicit within a bond structure (at redemption) is likely to be very attractive.

Capital preservation: Lower-risk investors hate losing accumulated capital, and so tend to want to preserve their capital no matter what. Alternative assets, such as gold, that speak to capital preservation may make a fleeting appearance in the cautious investors portfolio.

Currency exposure: Currency exposure probably becomes less of an issue for cautious investors. They usually want to limit their portfolio of investments to those denominated in the currency of their home base.

Equities: Shares are likely to be much less attractive because theyre regarded, rightly, as fairly risky. If an exposure to shares does exist within the portfolio theyre likely to be blue chip stocks with strong balance sheets and sensible valuations.

No intrinsic reason exists as to why cautious investors shouldnt be interested in more sophisticated styles of investing that look to limit downside risk by hedging.

Income: This is critically important to many cautious investors largely because as they approach retirement they tend to turn their attention to eking out a monthly income from their accumulated savings.

And here are some strategies the average adventurous investor is likely to follow:

A focus on capital growth.

A willingness to make losses in the short term.