Know the 3 investor profiles
Before taking the step of investing in investment funds , it is very important that we analyze ourselves. The function of this analysis will be to know what type of investors we are. Based on this, you will know to what extent you are willing to risk your money.
The investor profile indicates the relationship that exists between the risk that you are willing to assume and the returns that you hope to obtain. Therefore, it provides a better understanding of the relationship between risk and expectation. To use this knowledge, it will also be important to know what types of investment funds exist in the financial market.
We must take into account that:
- Knowing the investor profile perfectly is not easy. It involves evaluating various elements of a subjective nature. Sometimes, this makes them difficult to identify because not even the investor himself knows for sure.
- There is no absolute classification in which an investor fits perfectly.
- Our profile may vary due to certain causes. Some of them are the passage of time, changes in our financial situation and accumulated experience.
We can find as many investor profiles as ways to approach equity operations. In fact, many financial intermediaries make their trading recommendations based on investor profiles.
We have grouped the most basic profiles to simplify these categories. In this way you will be able to better understand the basic types of investors that usually operate in the markets.
Conservative profile
The conservative thinks a lot about investing money. Rarely do you risk buying and opt for the safest stocks on the financial markets, usually through your country’s home stock indices.
Speculative trading does not fall within your investment options.
Another characteristic that helps us identify this type of investor is that its investment portfolio includes securities that distribute dividends among its shareholders. It is an investment strategy very typical of the conservative profile. This strategy even leads these types of investors to achieve an annual and guaranteed return of 8%.
In short, the conservator is an investor who prefers to keep his capital safe, even if this means less profitability. It will carry out investments in fixed income that are usually medium to long term.
Moderate profile
The moderate investor tries to seek the best return on open market positions. But, in turn, he is not in favor of establishing very aggressive positions, but they also look for a guarantee in the investment of money.
These types of investors are more likely to try new investment formulas. However, at the same time, they are somewhat conservative.
They are characterized by the fact that they hardly carry out very fast operations, much less in the same trading session. They are more careful than those who open and close operations on the same day. Their expectations are for longer terms, from 3 to 24 months, in which very well defined objectives are set.
Investors with a moderate profile are open to trying less traditional securities, although without taking excessive risks.
Risky profile
The risky investor wants to earn a lot of money and also seeks to do it in a very short space of time. Its operations are very fast; some may even be closed on the same day they were opened.
They do not hesitate, therefore, to choose the most speculative securities in the market with which they can obtain many capital gains. But, for that very reason, they in turn run the great risk of losing a good part of their savings.
As investors with a more aggressive profile, they have more learning in the equity markets . This happens because they have a high level of both positive and negative experiences that provide greater knowledge in the investment sector.
Now that we have clarified the typical profiles that exist when it comes to investing money, the time comes when you reflect and identify yourself with one of them.
So that you do not have too many doubts when choosing your profile, we give you a series of tips that will be very useful if you take them into account in your decision.
- Define yourself by that investment profile that is adapted to the amount you have available for the investment.
- Do not change from one model to another with certain frequency , since the only thing that can cause you is confusion. Also, it can lead you to make more mistakes than necessary.
- Be responsible and don’t risk more money than you have.
