With so many investments choices today, it’s important to know what type of investor you are or want to be.
Are you cautious, nervous, aggressive, impetuous?
Knowing your investment personality can help you decide whether to invest in blue-chip stocks, small-cap stocks, bonds, treasuries, or certificates of deposit. For example, investors who lose sleep when the stock market drops may not want to invest in many stocks, especially volatile ones. Some investors get a thrill when a stock price rises often, and they like to check market fluctuations throughout the day. Others enjoy getting dividend checks in the mail every quarter.
To evaluate your investment personality, take this quick assessment. While not scientific, it will give you a good idea of how you handle risk in your life. There are no right or wrong answers, so check all that apply:
I really would:
___dye my hair the opposite shade and leave it
___order and eat octopus
___jump off a tall cliff into the ocean
___wear a funky shirt when no one else is
___spend my entire allowance trying to win a prize at the fair
___go to diner with a blind date
___attend an event (dance) alone in hopes of finding someone I know
___try a new menu item after a friend ordered and liked it
___dive into a pond if I could swim
___try yoga with a new friend, but not alone
___vacation in a new spot on a recommendation
___hike up a mountain after I’ve trained
___paint a room a bold color after seeing it elsewhere
___buy high-fashion shoes after several friends have them
___buy a relative a unique gift after she/he admired similar items
Rather than risk making a mistake, I would:
___not swim unless the water’s depth is clearly marked
___order only what I like to eat
___go to the same resort for annual vacations
___be with my friend group for entertainment
___get the same haircut I’ve always worn
___buy the brand of jeans I know
___choose my high school friend as a college roommate
___practice a piano song many times before a performance
Six to eight checks in group one? You are willing to take more risks than the average. Six to eight checks in group three shows you are on the cautious side. If you have the most checks in group two, consider yourself middle of the road on risk.
If you are comfortable with risk in one aspect of your life, chances are your tolerance for risk is similar in other areas. Invest accordingly.