Aggressive investors need to be more skeptical and discriminating than conservative investors, because they take on greater risk. Conservative investors mainly buy well-established companies with a history of earnings and possibly dividends, and a secure hold on a growing, or at least stable, clientele.

(In the latest issue of Stock Pickers Digest, our newsletter for aggressive investing, we’ve updated our buy/sell/hold advice on a home-security firm that has risen more than 30% for us in the past year. And its U.S. expansion could help push it even higher. Read on for further details.)

Cut risk by keeping aggressive investing picks to a reasonable portion of your overall portfolio

When a well-established, high-quality pick runs into problems, its stock price can fall — sometimes drastically. But it will usually survive. It can then go on to prosper all over again when good times return.

When something goes wrong with an aggressive investing stock pick, there is greater risk of serious, if not total, loss.

That’s why we advise that your aggressive investing picks make up only a reasonable portion of your portfolio — certainly no more than 30%. This even applies to those we recommend in Stock Pickers Digest. However, a few investments like these can make a big improvement in your total return.

Unique two-way alarm system sets AlarmForce apart

In the latest issue of Stock Pickers Digest, we update our buy/sell/hold advice on AlarmForce Industries (Toronto symbol AF). It’s an aggressive investing selection that’s certainly not without risk, but it’s prospering in a growing industry.

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.

AlarmForce sells two-way voice-alarm systems and monitoring services in Canada and the United States. The company has 107,900 subscribers, including 92,000 are in Canada. The remaining 15,900 are in the U.S.

AlarmForce’s system differs from others because it lets emergency operators verify an alarm by establishing immediate, two-way voice contact with homeowners. It then dispatches security personnel to the client’s home. If intruders are present, the two-way contact can frighten them away.

The company has used radio and TV advertising to gain a high profile. It gives its system away in order to add new subscribers. In return, subscribers pay $25 a month for monitoring service, and sign on with a three-year contract. AlarmForce makes and owns each system.

U.S. expansion gives this aggressive investing stock pick strong potential — but also increases its risk

The company continues to expand in Canada, and it also plans to continue adding subscribers in the U.S. Although the U.S. market has huge potential, many profitable Canadian firms have attempted to expand into it before, with mixed results.

As well, AlarmForce is competing with some well-established U.S. security firms, such as ADT Security Services. To be lower its risk, AlarmForce is taking a steady, disciplined approach to its U.S. expansion.

As we mentioned, AlarmForce has risen more than 30% in the past year. In the current Stock Pickers Digest, we look to see if it can go even higher.

You can get our full analysis, including clear buy/sell/hold advice, on AlarmForce and 19 other stocks that may be suitable for the part of your portfolio you devote to aggressive investing in Stock Pickers Digest. Even better, if you act now you can get this issue absolutely free. Click here to learn how.