What is your type?

Print media is awash with articles about the type of financial advisor you should be working with, the qualities that a financial advisor should possess et all. We believe that in this season of advisor bashing, it is but natural for print media to be carrying articles with gospel truth for IFAs.

We also believe that while such articles offer a valuable tool in selecting your personal financial advisor—they but are just one side of the coin. Investors can also similarly be grouped according to the traits they display while investing. Though IFAs cannot choose the clients they wish to work or not work with, but working with a like minded client can make life a little easier for the advisor & client.

While it can be interesting to note the kind of investor you are or better should be, it would be even more interesting to know the type of investor you should not be. What ever form of investing you choose, there are few traits that you should avoid while managing your money.

The Collector

This type of investor is an avid collector of stocks/schemes. They are a broker/agents’ delight.

He is so focused on accumulating that he usually cannot review his portfolio which in any case resembles Big Bazaar supermarket. To an outsider, such an investor may appear to be an eternal optimist who holds on to his funds even when it is under performing. The only reason why he cannot sell duds is because he is too busy accumulating new funds/stocks to his already bloated portfolio.

Our advice to such an investor would be to start selling NOW rather than on judgement day! Focus on your goals and tune your investments to achieving them.

The Hyper Investor

Such an investor usually does not hold on to his investments for long. He only needs a slight movement in the market to swing into action—buy a new stock/scheme and/or sell the old one. His portfolio is always in a fluid state---always on the move. So is his financial advisor.

Such an investor believes that constant churning of portfolio is the only way to generate a higher yield. His fund/stock should perform whether or not the underlying market is performing. He is a darling of publishers of investment journals and so called “market gurus” offering tips to their subscribers. The one thing he lacks is patience. He does not believe that “it is not your thinking that makes big money, it is sitting”. It’s one thing he will never be able to do.

Our advice to such an investor would be: - Calm down your nerves and ask yourself if the anxiety and sleepless nights you get with every movement in the market are worth it. Say to your self—“time in the market is more important than timing the market”, five thousand times before even thinking of a portfolio shuffle.

The status quo investor

Such investor never takes the first step to invest. He has to be nudged into buying/selling. He never updates himself with articles appearing in financial dailies. He for one would rarely refuse to believe “get rich quickly” stories.      

Our advice to him would be to simply stop believing that comes his way. He should also exercise his own judgment in evaluating an investment proposal.

Having talked about the investor that one should not become, let us now highlight traits that should be followed while investing:-

• It pays to adopt a long term perspective while investing your hard earned money. The basis of an investment should not be maximum returns but your long term goals.
• Choose an investment option after carefully analyzing your risk profile in consultation with your advisor.
• Since you have invested for long term, it would be futile to become anxious with every fluctuation in the market. You will only panic and take wrong decision. Look upon short term movements as hurdles while remaining focused on your long term goals.

Remember just as your personality reflects your investment style, the success of your investments will reflect your lifestyle. It pays to be a confident, sensible, long term investor.

Happy Investing!

Disclaimer:
The data/information in this article is meant for general reading purpose only and not meant to serve as a professional guide / investment advice for readers. This article has been prepared on the basis of publicly available information. Whilst no action has been suggested or offered based upon the information provided herein, due care has been taken to endeavor that the facts are accurate and reasonable as on date. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. We shall not be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits in any way from the data / information / opinions contained in this article.