When I made my first investment, I was dabbling into something I had zilch knowledge about. My
mediocre self was hopeful that without touching the capital, perhaps I could be reaping in
multiples after a year. Little did I know that was merely a wishful thought. A year later, I had
forgotten the password to my app, but I wish I never remembered. It ended in hot tears!
I had lost almost 40% of my money! (I didn’t invest in crypto…lol) I invested in an equity mutual
fund. In finance, there is a truism that the higher the risk, the higher the expected returns. In
retrospect, I found that although I wanted huge returns (who doesn’t anyway?), my returns
expectation did not commensurate with how much money I was able and willing to lose (risk
tolerance). Due to this risk-reward mismatch, many have got their fingers burnt in Ponzi
schemes, crypto dips, and the likes.
This piece aims to simply point to investments that may be suitable depending on your risk
tolerance. Meanwhile, it is imperative that you first assess how much money you earn or
possess, how much of it you can lose without losing any sleep, and how long you can invest the
money (investment horizon). This helps you determine your risk tolerance, which for this writing
would be classified as aggressive, moderate, and conservative.
Aggressive investors: to describe them more colloquially, they are not the men of peace, they
are the war, they are the…indaboski. Simply put, they have a high tolerance for risk, can
withstand the high volatility that comes with an asset, and invest a very high proportion of their
money in volatile assets. Such investors are darlings of derivatives, cryptocurrencies, junk
bonds, equities, and ubiquitous agric investments.
Moderate investors: These are the fence-sitting investors. They seek to balance their risk
tolerance with the expected returns. As such, they invest in stable instruments with relatively
less volatility. For instance, a moderate investor portfolio allocation may include 40% in blue-
chip stocks, 40% in money market instruments, 15% in bonds and 5% in cash. However, this is
not to infer that moderate investors do not experience losses. They do, but the return vagaries
Conservative investors: these kinds of investors don’t want to see crazy (in Black Camaru’s
voice). Hence, they invest a large proportion of their money in assets with little or no volatility.
They put the safety of their investment before the returns and majorly invest in government-
issued securities, highly rated money market instruments or cash, and equivalents e.g. fixed
Having conducted an assessment of your risk tolerance, you may then be able to tell if your
money is where it is supposed to be. Regardless, remember that just as in life, variety is the
spice of investment. Hence, diversify your investments by not concentrating on a single asset.
Conclusively, the investments mentioned above may not be directly assessable to retail
investors (investors with small capital). However, there are mutual funds that offer indirect
access to these assets.
Disclaimer: This article should not be taken as investment advice, kindly consult your
financial advisor before making any investment.