Do You Know What Type of Investor You Are? - Part 2
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.
If this sounds like you: Connecting with your advisor prior to any face-to-face meetings. Share new topics you want to discuss and ask them to send out relevant reports in advance so you have time to review them. This allows time to complete your own research so you have a richer, more valuable dialogue with your advisor.
Don’t work one-on-one with an advisor but you’re collaborative? You can still create a virtual collaboration network by blending self-study, digital tools, and research with insight from other collaborative investors through a variety of online resources.
Multi – institutional/risk-averse Traits
- You are a committed saver and investor, but have accounts with multiple financial services institutions.
- You see diversification of investments as a way to reduce risk.
- Your principal concerns are security and stability of capital preservation.
If this sounds like you: It’s important to discuss all of your assets with your advisor, even those held elsewhere. With this information, your advisor can create an accurate investment plan and give you a full view of your financial picture .
If your goal is stability, it’s essential to understand how all of your assets are allocated. Don’t confuse distributing your assets for diversification, he says. “Having that full picture allows your advisor to create an appropriate allocation in the accounts they manage while providing additional security toward achieving your long-term financial goals.”
Independent traits
- You pour over research, study financial reports, and enjoy spending time on financial matters.
- You like to make financial and investment decisions on your own.
If this sounds like you: Look for digital tools do research and look directly at your investments on your own or between meetings with an advisor. “Remember that an advisor can help you with access and guidance in a variety of other financial products such as lending, estate planning, and insurance as needs arise,” An advisor can also provide high-level advice, help you with complex decisions, and periodically evaluate your portfolio to ensure alignment with your investment objective.
It’s not unusual for your preferences to change over time, just like your investment objective could shift as you approach retirement. Don’t shy away from discussing changes in your preferences. “In our relationships it’s not about how an advisor wants to work with you, it’s about how you prefer to work with your advisor.”
(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.)
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