Determining What Kind of Investor You Are (Part 1)

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Many investors have no idea of what kind of investor they are. Instead of dealing with the question early on, they plod along with no idea what they are and what they are doing wrong.

This question is vital in finding out what your goals are, how you handle risk and how you respond to gaining or losing money – factors that greatly impact your investments.

Understanding these factors will help you avoid errors in choosing your investments. This will not only spare you from going through restless nights due to taking so much risk but also from losing bright opportunities to gain significant wealth.

Let us look at five various kinds of investor to help you appreciate the importance of this matter.

The conservative investor

The conservative investor is one who takes great effort in charting his or her course and safeguarding his money. Such type is a safe player, always concerned about gaining a better gain compared to merely holding on to cash; although this individual is content with being able to sleep soundly instead of tossing and turning at night in the hopes of achieving the biggest possible gains possible.

For various reasons these individuals could include senior investors nurturing their pension plans while making use of them, as well as younger investors who play it safe within shallow waters with their meager and hard-earned savings.

The focused investor

This type of investor is open to greater risk compared to the conservative version; although safeguarding their wealth is a primary consideration as well. And while they may be open to fresh ideas for investments, they tread cautiously and remain alert against anything that may endanger their investments.

The focused investors are always mindful of everything they do and remain steady on course with their investing strategy without being diverted or distracted by any mishaps. The have the tenacity to build their wealth through meticulous and prudent moves.

The driven investor

This type is the no-nonsense, business-only investor. They stay fixed on their goals and chart out a clear road map for those goals. He or she knows exactly the purpose for investing and what benefits to aim for. The next move is to choose the best investments to keep in a portfolio in order to attain the set goals.

The driven investor is open to taking on higher risk for greater gains, although this kind will make sure the rationale for doing something and what it will entail.

The exploring investor

This type of investor is obviously looking for a challenging discovery along the path of long-term investing. This individual has a deeply inquisitive mind. Investing has become a challenge for this investor and provides opportunities to test new ways of building wealth. Nevertheless, the exploring investor is not reckless but is open to experimenting to discover the most advantageous approach.

The exploring investor realizes that investing provides great wealth on the long-term basis and the chance to choose many directions goes well with this type. As a competent explorer, he or she keeps an emergency plan along with a broad mind for assessing the risks along the way.

The adventurous investor

The adventurous type of investor is one most open to taking steps that demand taking a leap of faith. This investor optimistically sees the glass as half-full, allowing for great possibilities in what others would see as dismal or risky.

This investor type has set up a contingency cash fund somewhere secure which allows him or her to handle investment risks.

As such, this individual goes for the unappreciated asset type or sector that is low-priced while others stay away from it, or could be picking more on the low market times – hoping that the long-term view favors such a strategy. 

Nevertheless, the adventurous investor does not gamble; on the contrary, each move is strictly weighed for its consequences.

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