There are all kinds of investors, so choosing the right investment for you will depend largely on your risk personality. If you're investing a portion of your money into mutual funds and you'd like to see a little more movement in your returns it may be time to choose a more aggressive approach to your portfolio. While there is a higher level of risk for this type of approach there is also a better chance of getting a higher return if you do. You can choose from those that have historically proven to be the best mutual funds for aggressive investors that can significantly increase your return on investment if you're ready for the ride.
Mutual Funds That Have a Strong Foundation
Some of the best mutual funds for aggressive investors will yield high returns of over 20% or more because of the fund managers aggressively seeking out firms that already have a solid balance sheet and already have a history of delivering strong returns on their investments. Many of these will have a minimum opening investment of $2,000, making it easy for you to get in on the game. Another feature the managers look for are those businesses that prefer reinvesting over those that pay their investors dividends. The more money invested, the more they can build up their returns.
Look for Large Capitalization Holdings
Many funds with a 3-year average return of 17% or more with a minimum opening investment of $2,000 can also prove to be one of the best mutual funds for aggressive investors. A look at their history should reveal a significant return over an extended period of time (10 years or more could give you a pretty good picture). How do they do it? The funds managers search for growing companies that currently hold capitalization of $2.5 billion or more along with a stock that is trading at a discount.
Consider Market Size and Niche Markets
A more aggressive type stock could yield a return as high as 45% with an initial opening investment of $2,500 over the same 3-year period. The fund managers concentrate their energies on rotating every two years. To invest in a particular business they look carefully at the market size of the niche the company is involved in, and its value in comparison to other similar listings.
Out-of-Favor Stocks
There are other types of fund that yield high returns over a period of three years but also have a very low initial investment of only $500 are those where the managers search for out-of-favor stocks that have the potential to turn things around. It may take time before the funds buy-and-hold strategy eventually pays off for their investors. Those who choose this method will have to exercise patience as they wait for these businesses to pay off on the investments made.
The decision to invest in a mutual fund that is a bit more risky is not for everyone. While these funds may have shown promising returns there is still a higher level of risk involved than those who concentrate entirely on the more stable options but the higher potential returns on investment can make it worth your while if you're willing to take the plunge.