Picking an investment strategy can feel like choosing the right speed on a treadmill…
Go too slow, and you might never reach your goal; too fast, and you’re gasping for breath.
Between being a Cautious Callum or a Daring Denise, there’s a whole spectrum of approaches, each with its own pace and payoff.
So, how do you know if you’re a Callum or a Denise?
That’s what we’re about to get into, without the jargon or generic advice.
Whether you’re new to investing or just fine-tuning your current approach, understanding where you sit on the all-important strategy spectrum can make all the difference.
Understanding the Strategy Spectrum
Investing can be thought of as settings on a heating system, ranging from conservative (keeping the temp nice and low to avoid surprise bills) to aggressive (whacking the heating on full).
The idea isn’t to pick the best strategy in theory, but rather the best strategy for you, which is individual to you and tailored to your financial situation.
Let’s walk through the most common strategies and what type of investor they suit best.
The Conservative Approach
If your priority is protecting what you’ve already built rather than chasing high returns, a conservative strategy might feel like a natural fit.
What it could look like:
- Greater emphasis on lower-risk, more stable investments
- Reduced exposure to equities or higher-volatility assets
- Focus on generating income and preserving capital
This could be applicable to, but not limited to:
- Investors who prioritise stability and predictability
- Those with lower risk tolerance, regardless of age
- People with short-term goals (1–3 years), or who may need access to their money soon
Things to watch:
While this approach reduces the chance of losing money in the short term, it could also potentially limit how much your money can grow.
Top easy-access savings accounts currently pay around 5% annual equivalent rate (AER) as of May 2025, but with inflation still running at 3.6% Consumer Prices Index (CPI), holding too much in cash long-term can still lead to a loss in real value. It’s safe, but that safety has a cost.
The Balanced Approach
This middle-of-the-road strategy is all about the balance between risk and reward, growth and income, now and later.
What it could look like:
- A balanced spread across different asset classes, designed to smooth out risk and return
- Typically includes a mix of investments aimed at both growth and income
- Structured to provide moderate, steady progress toward your goals
This could be applicable to, but not limited to:
- Investors seeking a steady balance between growth and stability
- Those who prefer a smoother investment journey, even over the long term
- People who value flexibility and want the option to adjust over time
Things to watch:
Balanced portfolios are popular for good reason. They’re flexible and tend to perform relatively well over time.
A classic 60/40 U.S. stock-and-bond mix returned ~8.6% annualised over the 10 years to June 30, 2025, based on Vanguard’s Balanced Index Fund. But remember, they still involve market exposure, so short-term volatility isn’t off the table.
The Growth-Oriented Approach
This strategy dials up the risk in pursuit of stronger long-term returns. It’s all about riding out short-term dips in favour of long-term compounding.
What it could looks like:
- High allocation to stocks, equity funds, global markets, or even emerging markets
- Minimal exposure to bonds or cash
- Typically focuses on capital appreciation, not income
This could be applicable to, but not limited to:
- Younger investors with long-term horizons
- People comfortable with market swings
- Those aiming for long-term goals like retirement, wealth building, or legacy planning
Things to watch:
Growth strategies can deliver solid returns, but they require patience and discipline. If a 20% market dip would send you into a panic, this may not be your best fit, or you may want to pair it with a safety buffer.
Matching Strategy to Goals
Choosing an investment strategy isn’t just about your risk tolerance, it should also reflect what you’re trying to achieve and when.
Here are a few quick pointers:
- Short-term goals (1–3 years): Stick to conservative, liquid investments that won’t dip at the wrong moment.
- Medium-term goals (3–10 years): A balanced strategy often works well here, offering a blend of growth potential and risk management.
- Long-term goals (10+ years): With more time, you have greater flexibility, whether that’s leaning into growth-focused investing or maintaining a steady, balanced approach that aligns with your comfort zone and objectives. The key is to make time and compounding work in your favour, however you invest.
Adapting Over Time
Your strategy doesn’t have to be set in stone. In fact, we usually advise that it shouldn’t be.
Most people adjust their approach as life evolves, taking on more risk in their youth, balancing it out in mid-life, and becoming more conservative as retirement approaches. What matters most is regular check-ins. If your circumstances change, your investment plan should too.
Avoiding Potential Strategy Slip-Ups
Falling into a pitfall is super easy when trying to discover your investment approach. Some things to watch out for and potentially avoid are:
- Being too cautious too early: Overweighting cash or bonds in your 30s and 40s can stifle growth just when you need it most.
- Going aggressive without a plan: Investing in high-growth assets without diversification or an exit plan can leave you exposed to the financial elements.
- Ignoring your comfort zone: Strategies only work if you can stick with them. If market dips keep you up at night, reassess your strategy.
- Setting and forgetting: It’s best to regularly review your strategy (we recommend doing so at least once a year) to ensure it still aligns with your goals.
How Informed Financial Planning Can Help
Finding the right investment strategy isn’t just about picking a portfolio and hoping for the best. It’s about making thoughtful decisions that match your goals, risk comfort, and time horizon, and revisiting those decisions as life changes.
At Informed Financial Planning, we specialise in helping people do exactly that. Whether you’re a first-time investor figuring out where to start or someone with an established portfolio looking to sharpen your strategy, we offer personalised, jargon-free advice that fits your unique circumstances.
Here’s how we can help:
- Clarify your goals and match them to a realistic, flexible strategy
- Build a portfolio that reflects your risk comfort and stage of life
- Navigate market changes and keep your plan on track through regular reviews
- Simplify complex decisions, from tax wrappers to income planning
We take the time to understand what matters to you today and beyond because the right investment strategy should feel like it’s working with you, not against you.
Ready to get started or want to review your current plan? Get in touch – we’d be happy to help.
Our Final Thoughts
There’s no one-size-fits-all answer to investing. What works for your friend, your neighbour, or that confident-sounding person on social media might be entirely wrong for you.
The key is to understand the spectrum of investment strategies, from conservative to aggressive, and then choose what aligns with your timeframe, goals, and risk appetite. Start where you are, keep it realistic, and don’t be afraid to adjust the dial as life changes.
If you’re unsure where you fit on the spectrum or want help building a strategy that’s tailored to your goals, getting professional financial advice can help you to find the pace and path that suits you best, whether you’re just starting out or ready to level up.
The value of investments and any income from them can fall as well as rise. You may not get back the original amount invested.
