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Yesterday we tackled the things you need to do prior toinvesting. It was stated that you need to be able to know your risk appetite
personality so you can be able to gauge just what kind of investor you are in
the first place. Being able to know it can then help you match the kind of
investment that would best fit you. Apart from that, you will also be able to
achieve your financial goals in accordance to your personality type.
Hence, today, we would be discussing the different investor
types. To date, there are four while some would just qualify it into two. As
you proceed, gauge what kind of investor are you in accordance to the matching
description. We shall call them C, MC, MA and A.
Conservative
The conservative investors are the ones who don’t want to
lose their hard earned money. As much as possible, if they invested 100,000,
losing even a peso of it is unforgivable. They are the ones who have short term
goals and also retirement ones that seek regular income stream. Their assets in
the first place do not provide great growth but a sense of security that it
will be maintained. Aside from that, it is also designed to provide income yet
preserve the principal balance. The ideal investing strategies for the
conservative ones are special deposit accounts, time deposits and savings
account. Mainly conservative ones tend to avoid risk at all costs. Their primary
investment goal is to preserve their money in the first place. Their aim is to
provide stable returns in the long run.
Moderately Conservative
They are investors who are much less willing to accept
certain variations in their portfolio. These are individuals who would be
needing their money within three to six years. They are also the ones looking
for a regular income stream. This kind of portfolio is geared towards
individual bonds or bond mutual funds. These kinds of investors also receive
income from dividends on an annual or quarterly basis from their investments. Their
goal is to seek reasonable levels of capital growth while maintaining their initial
input. Security is still their priority over wealth accumulation. Moderate
returns with moderate risk are something they can handle.
Moderately Aggressive
These are investors who seek longer term investment. That is
why they tend to mix their investments. Their aim is for capital growth. Security
of capital is still considered but is secondary to wealth accumulation. They also
aim high potential returns yet the risk margin associated with it is still
something acceptable on their end. They can be able to contain a certain
percentage loss.
Aggressive
These are investors who are more geared towards equity
investments like stocks and mutual funds. They are more open to risks and are
willing to accept it. They can see large and even short term swings in the
market without the need to worry. Their aim is for large growth in the market
often long term. Their primary investment is for capital growth and wealth
accumulation. They are more into highest potential return with acceptance of
the highest risk.
Being able to identify your investor personality will also
help you identify the kind of investment that would be ideal for you. Banks tend
to give you investor questionnaires so they can be able to determine your risk
appetite. It would be pretty hard to get equity investments for example yet you
panic when there is a sudden market blow. On another note, getting time
deposits when you yearn for more is also not a perfect fit. Hence, as early as
now identify your investor personality.
P.S. To those doing the 52 Week Money Challenge and 52 Week Money Challenge Version 2, it is Week 12 already! Did you deposit the next amount yet?
P.P.S Want to know more about investing, savings, stock market and more, check out my reference here. You can download free ebooks and resources too.