Do You Know What Type of Investor You Are? - Part 1
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live with dignity and fulfill their moral obligations towards charitable activities)
Here are four common types of investor traits – and what you need to know to help improve your investment experience if you find yourself aligning with one of these styles.
You already know if you’re a saver or a spender, but do you know what type of investor you are? There’s no right or wrong, better or best trait when it comes to your investment preferences. You might be surprised to learn many industry leaders find themselves delegating management of their investments entirely with a financial advisor.
“Understanding your natural tendencies as an investor, or even your preferences for how to make investment decisions, may help you make sound and balanced financial choices and get the most from your relationships with investment professionals.”
Delivery of investment advice is not one-size-fits-all. Clients oscillate on a spectrum of communication and engagement styles. “First begin by understanding your own preferences, and then share that understanding with your partner or spouse if you have one, and your financial team. Once your advisor knows your traits, they can deliver a customized experience tailored to your depth of knowledge, how you like to receive information, and how you prefer to work with your financial advisor.”
Here, we’ll focus on four common types of investor traits — and what you need to know to help improve your investment experience if you find yourself aligning with one of these styles.
Trusted relationship traits
- You have a strong, personal relationship with your advisor, and/or high confidence in the expertise behind managed investment products; you want your advisor or the investment managers to drive the decision-making.
- You’re less interested in the intricate details of your portfolio or its day-to-day management.
- You prefer to delegate your financial affairs to a professional or to select investment types that have built-in management features, because you don’t have either the time or the inclination to delve deeply into financial matters.
If this sounds like you: To help ensure you’re on track to reach your financial goals, “You may only want to meet with your advisor or check on your portfolio by other means a few times a year.” Tell your advisor to update you, at your preferred frequency, but ask them to present simplified views of your plan — even if it’s complex.
Collaborative Traits
- You have a high level of knowledge and interest in the financial industry, and you enjoy making investment and financial decisions. However, you don’t want to go it alone.
- You value guidance and advice from an experienced professional.
- You want your team to present investment recommendations that outline the features, benefits, and risks associated with several choices, but allow you to make the final decision.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor or certified financial planner. Mr Aslam does not have anything for sale.)
-----------------------------------------------------------------------------
