INVESTMENT PLANNING

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What Is an Investment ?

The term investment strategy refers to a set of principles designed to help individual investor achieve their financial and investment goals. This plan is what guides an investor's decisions based on goals, risk tolerance, and future needs for capital.1 They can vary from conservative (where they follow a low-risk strategy where the focus is on wealth protection) while others are highly aggressive (seeking rapid growth by focusing on capital appreciation).

Investors can use their strategies to formulate their own portfolios or do so through a financial professional. Strategies aren't static, which means they need to be reviewed periodically as circumstances change.3

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Investment strategies are styles of investing that help individuals meet their short- and long-term goals. Strategies depend on a variety of factors, including:

  • Age
  • Goals
  • Lifestyles
  • Financial situations
  • Available capital
  • Personal situations (family, living situation)
  • Expected returns

This, of course, isn't an exhaustive list and may include other details about the individual. These factors help an investor determine the kind of investments they choose to purchase, including stocks, bonds, money market funds, real estate, asset allocation, and how much risk they can tolerate.

Key Takeaways


  • An investment strategy is a plan designed to help individual investors achieve their financial and investment goals.
  • Your investment strategy depends on your personal circumstances, including your age, capital, risk tolerance, and goals.
  • Investment strategies range from conservative to highly aggressive, and include value and growth investing.
  • You should reevaluate your investment strategies as your personal situation changes.