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Investing is not a single or universal action. Each person has a different financial context, objectives and risk tolerance. That is why, before deciding where to put your money, it is worth making a fundamental reflection: what type of investor are you and what is your time horizon?
This article provides you with a practical guide to understanding different investment profiles, how they relate to risk and term, and which investment products might be the best fit for you.
Why is it important to know your investor profile?
Your investment profile is determined by three key factors:
- Risk tolerance: How much are you willing to lose without anxiety?
- Time horizon: When will you need your money back?
- Financial goal: Save for travel, a home, retirement or passive income?
By knowing these variables, you will be able to choose financial instruments that fit your needs and avoid impulsive decisions that can jeopardize your wealth.
Types of risk profiles
1. Conservative
- Risk tolerance: low
- Horizon: short to medium term
- Objective: capital preservation, modest but stable profitability
Recommended products:
- Interest-bearing accounts
- Time deposits
- Government bonds
- Short-term fixed income funds
These investors prioritize security and liquidity, even if that means lower returns.
Moderate
- Risk tolerance: medium
- Horizon: medium-long term
- Objective: balance between safety and profitability
Recommended products:
- Mixed funds (fixed income and equities)
- Low-cost index funds
- Real estate crowdfunding with defined terms
- Corporate bonds
This profile accepts some volatility in exchange for improving the potential return on their investments.
3. Aggressive
- Risk tolerance: high
- Horizon: long term
- Objective: to maximize the return on capital, even assuming temporary losses
Recommended products:
- Individual actions
- Thematic or sector ETFs
- Cryptoassets (as a minority part of the portfolio)
- Alternative investments (startups, emerging technology, etc.)
This type of investor is willing to bear significant ups and downs in the value of his portfolio if he obtains higher returns in the long term.
What role does the time horizon play?
Your time horizon directly influences the type of assets you can take on. For example:
- If you need the money in less than 1 year, you should prioritize liquidity and avoid volatile assets.
- If you invest for 3-5 years, you can include some equities or short-term real estate projects.
- At 10 years or more, you can afford to take on more risk, as short-term fluctuations tend to smooth out over time.
How to diversify according to your profile
Regardless of your profile, diversification is key. Don’t put all your eggs in one basket: spread your capital across asset classes, sectors and geographies. For example:
- A moderate profile could distribute its portfolio in 50% fixed income, 30% equities and 20% alternative investments or real estate.
- An aggressive profile could invest 70% in global equities, 20% in technology and 10% in controlled high-risk products.
How to adapt your strategy over time
Your profile is not static. It changes with your age, your income, your life goals or even your economic context.
For example:
- A 30-year-old with a stable income can take on more risk and prioritize growth.
- A 60-year-old approaching retirement will tend to seek stability and capital protection.
Reviewing your investment strategy at least once a year is recommended to ensure that it remains aligned with your goals.
Conclusion
Choosing the right investment product is not a matter of fashion or copying what others are doing. It is a personal decision that should be based on your risk profile, your time horizon and your specific objectives.
Take the time to get to know yourself financially, learn about the different options available and design a strategy that combines profitability, security and peace of mind. You can start by exploring different investment products that suit your needs and level of experience.
Remember: investing well is not a matter of luck, but of planning.
