What’s Your Investor Personality?
Take the Quiz to Find Out
When you think about investing, something inevitably comes to mind. Maybe it’s the opportunity to create wealth, maybe it’s fear of losing money , or maybe it’s somewhere in between. Without knowing your investor personality, and acting in-line with that personality, you could be setting yourself up for failure down the road.
Why Your Investor Personality Matters
I think it’s safe to say that money is a 90% mental and 10% mechanics. If you can get your mind right with what you want to accomplish with your money, that’s a large part of the battle. If you don’t know yourself and how to handle yourself in different money situations, you can be setting yourself up for failure.
That’s what happened to me 10 years ago. When I first started investing on my own I made a ton of mistakes. And it cost me big time. I knew nothing about investing on my own, and thought I could do it myself.
Needless to say I was wrong.
A big part of this expensive learning experience was not being in line with what I call my investor personality. The difference between my investor personality and the way I was investing at the time were direct opposites. It kept me up at night, and I realized very quickly that this way of investing wasn’t for me. I was a balanced investor, but I was acting like a thrill seeker.
The Different Types Of Investor Personalities
The way I see it (and like everything I write this is just my strange take on things) there are 4 distinct areas of investor personalities.
This person is new to investing. We are all new to it at some point. So if you have never invested before it’s ok. There is nothing wrong with being new to something. In fact, we all start there.
This person is risk adverse, they don’t want to do anything that could involve risking money. This may lend you to think that they won’t have big gains but depending on the person, and what they chose to invest in, they could have much bigger success than the other groups.
This is someone who can take some risk, but knows that they have to be cautious as well. They are what you would think of someone who is “well rounded”. If you were to give them a name it may be “Even Steven”, little bit of risk, little bit of safety, makes them feel just right.
This person is going for big gains and is willing to take on big risks. They are usually the people that have either a lot of time in their investing life, or they have a belief that when you invest you have to go big or go home. Like I mentioned earlier my mistake came from this mentality when looking back, it’s clear that isn’t who I was.
As I see it those are the main groups and you probably fit better in one of those groups than the other ones.
Which Investor Personality is Right?
This isn’t a right or wrong type of question. It’s more of a “best to know who you are” type of question. If you know yourself, and how you will behave in different investment situations, you can better prepare yourself for down the road.
Why Your Investor Personality Matters
Most of us have a blind spot with one side or another when it comes to investing. Either we see is all the possible gains or all the possible risks.
A good investor will look at both. That’s part of knowing your investor personality. It’s knowing what you are willing to risk, and what you are willing to make. While its great to think about a risky investment and making a fortune quickly, you have to be willing to accept the possible loss that comes along with it.
“Know yourself and to thine own self be true...” Shakespeare wasn’t talking about investing, but it definitely applies. If you have never invested before, or have been investing your whole life. You should know your investor personality.
To help you figure out where you are on the spectrum I’ve done up a fun 90 second quiz. I hope you enjoy it!