What Type Of Investor Are You..?
Have you ever wondered on the different type of investors in the stock market..? You will find a lot many based on the precedence and investment objectives.
The stock market relatively works around the growth of companies and the overall trading power of the common man. It’s where the inflation and deflation of stock occurs, which cover the way for substantial gains and incremental losses. We all know that the stock market is quite volatile & at any given point, making any profits through small investments might seem a farfetched idea.
Each person has individual reasons for buying a stock, and each person has a trading personality. Your trading personality depends on how much risk you can tolerate, what kind of research you are willing to do, where you think the economy is headed and how much of a hurry you are in. Despite all this individualism, trading styles boil down to a few distinct types. Consider which approach sounds like you.
Active Investors
If you look into the different types of investors in the stock market, the investors after having detailed research and analytics are called “Active investors” who are predominantly on the hunt for the next best thing in the stock market. It’s more likely that they revolve around the stock market 24/7 and are always glued to financial news channels, emerging trends around the stock market, and more. They don’t necessarily buy one day and sell the next, but they do pay attention to changes in trends and buy or sell based on those trends. These types of investors are an avid investor who takes a great deal of care with each investment decision and does not necessarily hold an investment for long term.
Passive Investors
Passive investors are those investors that want peace in life and no stress about their investments. The perfect example is investments in mutual funds. They may buy individual stock in established companies and hold that investment for a year or more. However, with such investments they don’t expect some vital improvements overnight as millions are investing in the same category. But, if you’re persistent and have the patience to sit out the waiting time frame, then becoming wealthy is also an option through this form of investing.
Speculators
Some investors look for a chance to make money fast. They search the market for stocks that are assured to go up. They scour the news for announcements about mergers that could affect a company positively, and then they dive on the stocks of those companies. Before the news gets official, these investors start investing in that company and wait for the prices to rise. With rising prices, they don’t wait for an extended period; instead, sell it off at a price that would fetch them some profits. They have a broad portfolio comprising of investments in various segments to gain vital returns.
It is important to bear in mind that wealth creation is a time-consuming process and staying invested will bear fruit. Each investor has their own will and way of making necessary investments and ensures that they get their returns no matter what.
However, from the above-given list of investors, depending upon your financial status and inclination over investing in the stock market, a calculation and statistical investment can reap your fantastic benefits and higher returns.
Taking a cue from Warren Buffett, he says, “Success in investing is not associated with one’s I.Q.” At the end of the day, what one needs is the temperament to restrain impulses that usually get most people into trouble.
One comment
Nimish Rambhia
October 9, 2021 at 9:16 am
Nice.