What Type of Investor Are You?

When it comes to keeping or growing your cash, do you like to “roll the dice" or play it safe? Do you like to keep things simple or mix them up? No two investors are exactly the same. Knowing your own approach can make setting goals and planning more rewarding.

In the spirit of "know thyself," where do you best fit? Explore and compare these common investor personalities.

Protector

Motto: A penny saved is a penny earned.

Being somewhat conservative, you may take some risks in life, but you're not willing to risk your money. Protecting your capital is priority number one, and the prospect of even a temporary decline makes you hesitate about buying investments with fluctuating values.Still, you know there are choices that are right for you. You're after the peace of mind that comes from focusing on capital preservation and slowly growing your savings; you take great comfort in knowing that even if your returns are modest, your investment value won't surprise you. To help meet your financial and lifestyle goals over time, you could look for investments that are expected to keep up with inflation.

Potential Benefits: Capital preservation, guaranteed investments and certainty about your returns can equal peace of mind. 

Potential Risks: Low returns may mean you're not keeping up with inflation. Stronger investment growth may be needed, depending on your long-term goals.

How to Thrive:

• Set financial goals to work towards. Check your progress regularly to see if you're on the right track.
• Take the time to learn more about different investment choices such as stocks, bonds, mutual funds and exchange traded funds (ETFs).

Balancer

Motto: Everything in moderation.

Balanced investors have found a healthy medium on the risk-reward spectrum that works for them. You understand that taking some risk is necessary to achieve your long-term financial goals. Once you've identified your comfort zone and ideal blend of equities, fixed income and cash, you'll want to monitor your investments over time. That will help you ensure you've always got the right mix.

Potential Benefits: Doing the upfront work of assessing your goals, understanding your risk tolerance and building a diversified portfolio to match should serve you well in your bid for investment success.

Potential Risks: You've done well to minimize risk, but life situations and goals can change. Consider reassessing both your goals and your progress towards achieving them every few years.

How to Thrive:

• Setting goals and doing research are important in your investing journey. They can help you better evaluate your situation.
• Keep an eye on your investments. Monitoring your portfolio regularly will help you to ensure it continues to reflect your investing strategy.

Adventurer

Motto: Now, not later. You're inspired by overnight success stories and love hearing about small businesses that turn into multi-million-dollar enterprises, or penny stock investments that skyrocket. You're willing to step out of your comfort zone and take risks with the goal of achieving strong returns over a short period of time. To help guide your decisions, develop a clear investment plan and take advantage of different investing strategies and research tools.

Potential Benefits: Your go-big-or-go-home mantra can mean potentially large swings in your portfolio's value – nice when it's up, and not so great when it's down.

Potential Risks: With a sizeable chunk of your portfolio invested aggressively, there's a risk of making emotional decisions you may regret. 

How to Thrive:

• Channel some energy into research to help choose investments.
• Read about different investing strategies to help support your ideas. Investment analysis can be important in decision-making.

Competitor

Motto: Want to race?

You've got a competitive spirit fuelling your fire and you do your homework. You're willing to take the time to research and evaluate new opportunities and take advantage of market changes. You're an active investor who wants to beat equity-market performance, not just match it. Let your long-term financial goals guide your investment choices. Continue to be a keen researcher who looks for new information to give yourself an edge. Keep in mind that setting goals can be key to keeping your investments on track and helping yourself make sound decisions.

Potential Benefits: Strong research and a desire for information mean your investment choices are carefully thought out. 

Potential Risks: A short-term view could lead to taking aggressive risks when your portfolio underperforms in any given year, even though your investment choices could do well over the long haul. When chasing short-term returns, you run the risk of losses if higher-risk investments don't perform well. 

How to Thrive:

• Brush up on effective investing strategies to help keep yourself on track.
• Broaden your investing style by setting personal investment goals.