5 Investor Personality Types: Which One Suits You the Best?
Your style of investing can be mostly attributed to the way of managing your personal finance. This is called having a certain investor personality. Knowing accurately about the investor personality type that you are, you can better understand the potential pitfalls of your investment approach. Even more – you can improve your chances of return.
Here are the most widely recognized 5 investor personality types and how they can improve their chances of return:
The Lazy Investor: The lazy investors seldom care to think about their investments and how to make it more fruitful. They have everything set to autopilot. Their investment funds get transferred from their bank accounts on the paycheck day to a certain investment portfolio for which they'll get a return that they may haven't even made an estimate of.
By re-balancing their portfolio once or twice a year by transferring funds to set the value of stocks and bonds back to its original state, they can easily keep check on where their money is going and what returns they can expect from them.
The Anxious Investor: They keep themselves regularly updated on the market news and performance. They check the current market price and chart frequently on their smartphone, newspaper, TV, or wherever they go. This keeps them always aware about the value of their assets and keeps analyzing about their performance with each good and bad day in the market. This kind of anxiousness can easily get them stressed out and feel discouraged enough to sell the stocks at low cost.
By relaxing and checking in on the stock market and their portfolio less often, say quarterly, they can get better insights on the nature and direction of the winds that flow in the stock market. It will also let them relax and do more productive works.
The Risk Takers: The risk takers try to get the most out of their each buy and sell. They do their study and research and are always well-informed about the latest business news and trends. They try to time their selling right when the price is near the peak before most investors figure out that it is going down.
By investing in good stocks and holding them for long hauls, they can make much more money than what they are making by going for a short run. Also, they should be careful when trying to sell at peak as a wrong timing can make you lose significant amount of money.
The Conscientious Investor: These types of investors don't invest in companies that promote values or products contrary to their moral principles. Most of them would invest in only socially or environmentally responsible companies.
The conscientious investor has a limited option to invest their money which, as a result, lowers their return. However, their consumer purchase actions and stock picks are more likely to exert influence in the economy.
The Reluctant Investor: There are some investors who don't actually want to own stocks. They believe in more simple, understandable, and controllable options such as real estate, collectibles, gold, and even bonds. They fear the volatility of the stocks.
Historically, stocks have been a more reliable investment option than all other options out there. So, the reluctant investors should not shy away from investing in stocks. To gain confidence, they should start by investing a small portion of their investment funds.
By knowing the pros and the cons about your investor personality types, you can better manage your investment options and get the most return out of it.
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