The term aggressive strategy refers to the building of an investment portfolio that attempts to increase returns by purchasing a larger proportion of higher risk securities. An aggressive investment strategy typically involves allocating a large portion of the portfolio's funds to equities.
An aggressive strategy is a portfolio allocation that is willing to take on additional risk in exchange for higher returns. This type of portfolio is well suited to individuals with high risk tolerance scores. Typically, a larger percentage of the asset's funds will be allocated to equities, such as common stocks, and a smaller percentage allocated to fixed-income securities, such as bonds. The primary objective of an aggressive strategy is an above average return on investment through capital appreciation.
As is the case with other investment strategies, an aggressive portfolio requires rebalancing to maintain the desired asset allocation. Assuming more risk will also mean the volatility of the portfolio will be greater. Investors adopting this strategy should be prepared to incur significant losses at times, in addition to the potential for above average gains.