Investment Personalities

Investing can seem overwhelming, but finding the investment type best suited to your personality is possible. Let's look at three common sayings to help identify what types of investments are the best fits for you.

Hindsight is 20/20

When someone adopts the saying “Hindsight is 20/20,” they tend to be one of two things: someone who regrets or someone who makes excuses. If you’re suffering from regret, then you are able to see how following a different course could have led to a better outcome. On the other hand, you could just be making an excuse, but you at least acknowledge a better option. Either way, it’s good to be able to recognize the past for what it is — the past.

If you’re this type of person and are able to look back, learn, and see a better option, you might readily dabble in the stock market. You can easily learn from your own mistakes and thereby prepare yourself for better choices in the future.

However, if you are unable to look back and see that you could have done something different, you may be better fitted to investing through a broker. She will be able to better make decisions for you, with the objectivity necessary. Dabbling in dividends may be a good fit as well; you can utilize your critical skills while making more retrospective decisions.

Prevention is Worth More Than a Cure

Now, on the other hand, if you related more with the saying “Prevention is worth more than a cure,” you’re a researcher. Your personality will likely lend itself well to completing the leg work necessary in investments: learning the risks of each company, knowing how the company is performing, identifying their "vital signs," etc. You will also be prepared to keep a close eye on your stock choice.

If you’re in this personality category, you probably feel that you can never be too cautious when it comes to your money. This type of personality is a better match with stocks, bonds, and other active investments. Investing is risky enough without jumping out of an airplane before you’ve checked to see that you’ve grabbed the bag with a parachute, so if you think prevention is worth more than a cure, grab your chute and jump!

Why Do Tomorrow What You Can Put Off Until Today?

Finally, we come to the saying “Why do tomorrow what you can put off until today?” If you identify with this saying, you may be a person who starts off fine with great intentions, but then you kind of fade out at the end.

The idea here is upkeep. Are you willing to stay on top of your investments and monitor their vitals? If you say yes now but often find yourself unconcerned with the fine details months down the road, your personality may be best matched with packaged investments.

These types of investments come prepackaged and tied with a pretty little bow, all done at the hands of a professional financial advisor or investment manager. Think mutual funds, separate managed accounts (SPAs), hedge funds, closed-end funds, variable annuities, and hedge funds.

With these investments, you can do the research in the beginning to find the package that works best towards your goals, but when your motivation starts to dwindle, there will already be someone in place to take care of the finer details.

No matter your personality type, there is a perfect investment type match for you! I hope you could identify yourself in one of these sayings: let us know what type of personality/investor you are in the space below.

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Anonymous's picture

Alex | Perfecting Dad wrote:

Wed, 07/06/2011 - 03:10 Comment #: 1

I would say that I'm a risky investor. I put in a little money into ventures that might make big gains. Luck is what happens when preparation meets opportunity.

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