What’s Your Investor Personality?
People have different goals, personalities and methods when it comes to investing. Your success in the market will be determined your understanding of these factors. Some people are aggressive while others are conservative; some are optimistic while others are too scared to take a risk. According to this personality, you should choose the right investment product that would perfectly fit your investor personality.
Take time to analyze yourself and your financial goals. For example, investment products that can ride the waves of economic ups and downs are perfect for conservative investors since they won’t be adversely affected. Below are some of the basic personality profiles of investors:
They are self-assured and very confident with their decisions. They are more of doers than thinkers. They trust their investment abilities and they are very independent. They will always find the best solution to a problem before making a move. Individualistic investors think highly of themselves and believe they have everything that it takes to reach the top.
Cautious investors place a priority on certainty and financial security. They choose safety over higher return, but riskier investments. They rather not make independent investment decisions but are also seldom open to professional advice. Their indecision often leads to missed opportunities. Once a cautious investor chooses an investment, they seldom change their portfolio.
Spontaneous investors react quickly to changing market conditions, and are prone to making sudden changes or adjustments. As a result, they often fall victim to rumours and hear-say, making knee-jerk decisions based solely on what they hear instead of professional advice, or careful analysis.
Methodical investors are structured, process-driven thinkers. They are diligent in carrying out independent investment research, sometimes going through enormous amounts of data and financial reports in order to arrive at a decision. These investors tend to be conservative, and base their decisions on hard facts rather than their emotions about a certain investment. Their method has a downside though, as they can be slow to react to new information.
Whatever your personality type, you should always choose the investment type that suit your investment personality. Once you know what your investment personality is, make investment decisions that will comfortably suit your personality, even if they may not maximize your profits. Peace of mind is as valuable (if not more) than high investment returns.
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