Investor Types - What Type Of Investor Are You

Investor Types - What Type Of Investor Are You
There are many different types of investors in the stock
market. Some people are bearish, believing that the market
is going to fall, while others are bullish, believing that
the market is about to rise. Within both categorizations,
investors can be classified into the following types:
Aggressive, Moderately Aggressive, Moderately Conservative,
and Conservative. Which type are you?

Aggressive investors tend to concentrate on equity
investments such as individual stocks and mutual funds.
They are open to more risk, willing to see large short term
swings in market performance on an annualized basis. They
aim for large growth in the market, often above what the
long term market performance has shown. They are also
seeking quick growth in their portfolio, and some are even
called "Day Traders." The recommendation for this investor
is to have a minimum timeframe of 15 years before they will
need their principal investment, to allow for variations in
the market to average out. The average rates of return that
an aggressive investor expects to see is between 12-14%, a
few percentage points above the long term stock market
average.

Moderately Aggressive investors also seek longer term
investment gains through a mix of equity investments. While
many of the investments are the same, the overall portfolio
contains some more conservative investments, creating a
portfolio that builds wealth with less annual swings in the
portfolio's performance. An investor with a time frame of
between 6-10+ years is most appropriate for this type of
portfolio and the average level of return that an investor
can expect to receive is between 10-11% annually. This
annual investment return represents the stock market's long
term average growth over the past several decades.

Moderately Conservative investors are much less willing to
accept variations in their portfolio's balance. Individuals
that are going to need their money within 3-6 years are
most suitable for this investment strategy, or those
looking for a regular income stream. A moderately
conservative portfolio is often more weighted to individual
bonds or bond mutual funds, and can expect to earn between
6-8% in annual growth. Moderately Conservative investors
also typically receive income from dividends on a quarterly
or annual basis from their investments.

Conservative investors are typically those with either a
short term goal (less than 3 years), or those who are in
retirement seeking a regular income stream. These
portfolios tilt away from equity investments into more
preservation investments, like real estate investment
trusts (R.E.I.T.'s), individual bonds, bond funds,
municipal bonds and annuities. These assets are not
intended to provide great growth within the portfolio, but
are designed to provide income and preserve the principal
balance over the investor's estimated lifespan.

These descriptions are meant to serve as a guide as there
are many different definitions of these categories
throughout the international stock markets. In order to
determine what type of investor you are, take a risk
tolerance quiz online and consider your gut feelings about
the level of risk that you are willing to accept. Whether
you are aggressive, moderately aggressive, moderately
conservative or conservative, you are sure to build long
term wealth when investing into the stock market.

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