Five easy steps to find out what type of investor you are

Fsp Invest, 20 Aug. 2013

Tags: type of investor, how to work out what type of investor you are, risk, attitude to risk, investing

When it comes to investing on the stock market, it’s crucial to know what kind of investor you are. Depending on your attitude to risk, for example, will determine what type of investments you will want to buy. Read on to find out what type of investor you are…

If you’re not sure what type of investor you are, look no further.

How much risk are you happy with?

If you answer the following five questions, you’ll know exactly what type of investor you are, Gareth Stokes reveals in Fear, Greed and the Stock Market

1. Which best describes you?
a) Old, tried and tested is best.
b) I don’t want to make mistakes.
c) I’m a risk taker and as such hope to make an awful lot of money.
d) It’s my money so I decide when and where to invest it.

2. You have a sudden windfall of R100 000. What do you do?
a) Put it in a safe bank account.
b) Keep it under your mattress.
c) Invest purely in shares.
d) Invest in a mixture of shares and other more secure investments.

3. Your low risk shares go up in line with the market. You feel:
a) This is quite satisfactory.
b) Get out and put it in a bank account.
c) Furious! You’ve played it too safe.
d) Next time, you’ll invest in some high-growth shares as well.

4. Two of your shares are showing a 30% profit since you bought them one year ago. Do you:
a) Sell one of them to capture the profit, but retain the other.
b) Sell them both with some relief!
c) Double up!
d) Be ready to sell at the first sign of a downturn.

5. You hold a risky biotech stock and the share plunges 80% in value. Do you:
a) Never buy a speculative stock again.
b) Panic and get out of the stock market.
c) Shrug. You win some, you lose some.
d) Choose your next speculative share more carefully.

And now the moment of truth…
  • If you answered mostly Bs you’re a timid investor
  • If you answered mostly As, you’re a cautious investor
  • If you answered mostly Ds, you’re a shrewd investor
  • If you answered mostly Cs, you’re an adventurous investor

There you have it, how to work out what type of investor you are.

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