We’ve had a lot of success over the years with the high return investments we recommend in Stock Pickers Digest, our newsletter for aggressive investing.

Of course, aggressive picks have the potential to give you bigger gains than your conservative selections.

Still, aggressive stocks are best suited to investors who can accept substantial risk in the portion of their portfolios that they devote to these types of investments. You can be wrong on any of your stock picks, of course. But when you’re wrong on a speculative stock, your losses are likely to be bigger than they would be with a well-established company.

Here are three key ways to cut your risk in aggressive investing. They’re at the heart of our approach to picking high return investments for Stock Pickers Digest.

1. Spread your aggressive holdings out across the 5 main economic sectors: As with your more conservative holdings, we recommend that you cut your risk by spreading your aggressive holdings across the five main economic sectors (Manufacturing & Industry; Resources; Consumer; Finance; and Utilities).
   
   Compared to a conservative investor, you may choose to invest more heavily in Manufacturing and Resources, the two riskiest sectors. If so, take care to spread your money out across the many industries within each of these sectors. That way, you protect yourself from an unforeseeable industry downturn.

For a rising portfolio Learn everything you need to know in 'How to Find the Best Growth Stocks' for FREE from The Successful Investor. Canadian Growth Stocks: CGI Group, CAE Inc., Fortis Inc. Stock and more.  I consent to receiving information from The Successful Investor via email. I understand I can unsubscribe from these updates at any time.

2. Stay focused on investment quality: You’ll want to avoid loading your aggressive portfolio with “penny mines” (speculative mining stocks that have not yet proven they have a mineral deposit that can be mined at a profit). You’ll also want to buy few, if any, “concept stocks”— junior industrials that have a business plan but have not yet established a business, much less made a profit or paid any dividends. Stocks like these expose you to a serious risk of total loss.
   
   In contrast, the companies you’ll find in Stock Pickers Digest have established a business and have at least some history of building revenue and cash flow. They are well beyond the risky start-up phase where so many companies fail.
3. Apply our sell-half rule. Selling half after a double is a good strategy for a high-risk investment, such as a penny mine. In fact, in Stock Pickers Digest, we routinely advise selling half of any high-risk investment that doubles.
   
   This can give you a clearer perspective on what to do with the other half of your investment. After all, if you are too slow to sell speculative stuff, your profits and even your principal can evaporate all too quickly.

If you’re looking for high return investments with the potential for gains of 50% or more in 6 months or less, you should subscribe to Stock Pickers Digest.

The latest issue gives you our full analysis, including clear buy/sell/hold advice, on 19 stocks that may be suitable for the part of your portfolio you devote to aggressive investing. What’s more, you can get this issue and much more ABSOLUTELY FREE. Click here to learn how.