Aggressive Growth Funds: High-Risk, High-Reward Investing

Aggressive growth funds are suitable for mutual fund investors who are willing to accept high risk stock and share price volatility for the highest capital gains. Aggressive growth funds tend to invest in new issues, stock options and companies that are underpriced relative to their future growth potential.

Typically, the funds are ideal for those who have years to build wealth for retirement. The funds do well when the economy is in an upswing, and capital gains can be lost when the market does poorly. Therefore, anyone who must preserve capital or needs investment returns for current retirement income should not be involved in aggressive investments.