Definition
The term 100% equities strategy refers to the creation of an investment portfolio that consists solely of common stock. A 100% equities portfolio can be assembled by an investor, or take the form of a pooled account such as a mutual fund.
Explanation
Also known as an all equities investment strategy, a 100% equities strategy is a portfolio that only contains equities, or common stock. As is the case with aggressive growth strategies, this type of portfolio is better suited to individuals with high risk tolerance scores. The primary objective of an all equities investment strategy is long-term capital appreciation, meaning growth in the value of the common stock held in the portfolio.
Historically, equities provided investors with higher returns than other asset classes such as bonds and holding cash. However, the higher returns associated with this strategy come with higher risk, which means the volatility of the portfolio will be greater. While creating a diversified portfolio can help eliminate individual stock or industry risk, market risk cannot be lowered via diversification. Investors should be prepared to incur significant losses at times, in addition to the potential for above average gains.
Related Terms
- The term risk of ruin refers to the probability an individual could lose all of their capital investments and the recovery of loss is not possible. The risk of ruin concept has its roots in the gambling industry, but has since been associated with both the investing and insurance industries.
Moneyzine EditorSeptember 21st, 2023 
The term conservative investing refers to a strategy that attempts to preserve the value of a portfolio by investing in low risk securities. A conservative investment portfolio would include blue chip stocks as well as fixed income securities.Moneyzine EditorJanuary 11th, 2024- The term preservation of capital refers to a strategy that attempts to prevent a loss of funds in a portfolio. Preservation of capital is important to investors that are not willing to risk a loss, even in the near term.Moneyzine EditorNovember 6th, 2024
- The term 90 - 10 strategy refers to the creation of an investment portfolio that allocates 90% of the fund's assets to interest bearing securities and 10% to higher risk securities. The 90 - 10 strategy is a relatively conservative approach to investing.Moneyzine EditorNovember 6th, 2024
The term capital growth strategy refers to the creation of an investment portfolio that seeks to maximize value in the long term. A capital growth portfolio will allocate more than half of the fund's assets to equities.Moneyzine EditorJanuary 10th, 2024
