Trisha Shetty (Editor)

Investor profile

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An investor profile or style defines an individual's preferences in investment decisions, for example:

Contents

  • Short term trading (active management) or long term holding (buy and hold)
  • Risk-averse or risk tolerant / seeker
  • All classes of assets or just one (stocks for example)
  • Value stock, growth stocks, quality stocks, defensive or cyclical stocks...
  • Big cap or small cap (Market capitalization) stocks,
  • Use or not of derivatives
  • Home turf or international diversification
  • Hands on, or via investment funds

    • What determines an investor profile

    The style / profile is determined by

    Objective traits

  • Objective personal or social traits such as age, gender, income, wealth, family, tax situation, opportunities......

    • Subjective attitudes

  • Subjective attitudes, linked to the temper (emotions) and the beliefs (cognition) of the investor.

    • Balance between risk and return

    An investor's style is shaped by his or her sense of balance between risk and return. Some investors can tolerate greater risk to have greater return. Some investors want less risk and are content with a reasonable return.

  • Generally, the investor's financial return / risk objectives, assuming they are precisely set and fully rational.

    • Areas of focus

    An investor profile is shaped by the area that an investor chooses to focus on; such as:

  • stocks or bonds,
  • technology, commodity, or real estate
  • small-cap or large-cap companies

    • Investment strategies

    An investor profile is also shaped by the strategy the investor uses:

  • ethical investing
  • growth investing
  • index investing
  • quality investing
  • value investing

    • Valuation methods

    An investor profile is also shaped by the valuation method the investor uses:

  • fundamental analysis
  • technical analysis
  • quantitative analysis

    • References

    Investor profile Wikipedia
    (Text) CC BY-SA


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