Partner With Us NRI

Open Free Trading Account Online with ICICIDIRECT

Incur '0' Brokerage upto ₹500

How to Invest Based on Your Investor Personality?

5 Mins 25 Oct 2022 0 COMMENT


You may have found personality quizzes tempting online. In college days, you would have analysed friends based on their astrological signs. There is always an intense discussion on every occasion about personality types. The wonderland of investment is no exception. There are four investor types: the preserver, the follower, the independent and the accumulator.

The following questions will help you determine what kind of investor you are:

Do you take decisions regarding your investments thinking of only the short term?

  • Always
  • Sometimes
  • Not Very Often
  • Never

Do you overestimate your returns on investment?

  • Always
  • Sometimes
  • Not Very Often
  • Never

Compared to people your age, gender, wealth, and stage of life, what do you feel your odds are of achieving and maintaining your financial goals over the next ten years?

  • High
  • Very High
  • Average
  • Low

Do you invest regularly under different buckets according to your life goals?

  • Always
  • Sometimes
  • Not Very Often
  • Never

Have you been able to at least save 10% of your income?

  • Always
  • Sometimes
  • Not Very Often
  • Never

Do you make regular profits from your investment decisions?

  • Always
  • Sometimes
  • Not Very Often
  • Never

The Results

If you have answered with the first option more than four times, you are a preserver.

The Preserver

You perhaps don’t take too much risk, prioritising financial comfort and money preservation instead to increase wealth. Preservers carefully watch their assets and focus on short-term performance. If you are a preserver, you may obsess over short-term goals and preserving the wealth you have generated. You make wise financial choices and prepare for taxes well in advance. You've even thought ahead to your retirement. But that doesn't mean you can't accomplish more.

If you have answered with the second option more than four times, you are independent.

The Independent

Independent investors are those who enjoy taking part in the investment process and have unique thoughts about investing. Unlike followers, they are actively involved in the financial markets and particularly interested in investment. Many independents are analytical and critical thinkers who believe in their ability to make sound decisions.

Even if you have already made some progress in enhancing your financial situation, you still require a clear economic direction. Even if you have a surplus, you might not be investing it well. To assist you in better financial planning, speak with a financial counsellor.

If you have answered with the third option more than four times you are an accumulator.

The Accumulator

Investors who desire to build wealth and have the conviction to accomplish it are basically accumulators. When making investment decisions, accumulators frequently prefer to be in charge. Accumulators believe they will be successful investors since they have regularly succeeded in their previous deals.

You have active investments but have overestimated your worth, which is not a green flag in the investment world. Take help from experts and grow wisely.

If you have answered with the fourth option more than four times you are a follower.

The Follower

Investors who tend to follow rather than have their own opinions or make their own investment decisions are known as followers. They frequently take advice from friends, coworkers, the general investing fad, or the status quo. Due to this, they lack a long-term strategy.

If you are a follower, you perhaps invest according to other people’s investment plans rather than your own. You don't have a long-term plan and keep hopping on new fads and trends now and then. Sit with a financial planner and learn the right way to invest for the best benefits.

The Challenges

Every investor faces specific challenges while investing. To solve the issue, one must understand the root cause.

The Preserver's Challenge

Short, mid, and long-term objectives should all be considered while creating an investing strategy. A preserver risks deciding based on short-term performance and overemphasising short-term returns, which is harmful in the long run.

The Follower's Challenge

Investors who follow the herd tend to make the same investments as them. When you follow fund managers, you usually do so because they have the resources and tools necessary to take immediate action when new information becomes available which is mostly not in hands of followers.

The Independent's Challenge

Independents have problems overly depending on their line of reasoning, comparable to the overconfidence bias that affects accumulators. Humans can trick themselves into believing they are suitable or don't require advice, even when that is not the case.

The Accumulator's Challenge

Accumulators routinely overestimate their capacity to forecast future returns as investors. Even though history has demonstrated that it is impossible to predict markets on a broad scale, accumulators still attempt to do so and expose themselves to a high level of risk.

The Solution

The best way to overcome challenges as an investor is to focus on goal-based investing instead of investing randomly. The secret to living a fulfilled life is to take baby steps and achieve your goals in buckets. When you start investing according to your goals, you do justice to the amount of money, time and effort you put in.

With goal-based investing, you avoid the risk of not fulfilling your goals and know carefully and precisely what more is needed to achieve a specific goal.

We have a solution on how you can do it effortlessly, a plan for every investor's personality type. Start with LIFEY (Lifestage Investments for You), a system that enables you to design portfolios to help you reach your life stage milestones and allocate your money wisely. An intelligent way to plan, invest and track your life goals.

There are seven pre-defined milestones, including retirement, marriage, education, travel, home ownership, wealth building, and one custom milestone you can define. You must give each milestone a different name when establishing it. For each milestone type, you can create more than one milestone and keep track of them all using the milestone names you've given them. With LIFEY, investing is easy and goal-based. You are sure to reach your goals when you define them properly and invest accordingly.

Disclaimer: ICICI Securities Ltd.( I-Sec). – AMFI registered Mutual fund distributor. Registered office - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.  AMFI Regn. No.: ARN-0845. SEBI research analyst Registration no.-INH000000990. We are distributors for Mutual funds and all disputes with respect to the distribution activity / research would not have access to Exchange investor redressal or Arbitration mechanism.

Please note that Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. I-Sec does not assure that the fund's objectivewill be achieved. Please note. NAV of the schemes may go up or down depending upon the factors and forces affecting the securities markets.Information mentioned herein is not necessarily indicative of future results and may not necessarily provide a basis for comparison with other investments. Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. Investors should make independent judgment with regard suitability, profitability, and fitness of any product or service offered herein above. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

The client agrees and acknowledges that the LIFEY tool / facility provided by ICICI Securities are not intended to supply investment, financial, tax or legal advice. It is not investment advisory service and any observations concerning any security or investment advisory is not a recommendation to buy, sell or hold such investment or security or to make any other investment decisions. Client acknowledges and agree that any use of the services, any decisions made in reliance on the aforesaid services, including any trading or investment decisions or strategies, are made at your own risk. It is entirely client’s responsibility to assess the appropriateness, suitability, and practicality of the investment. The said services is just incidental to the distribution of mutual fund.