An investor profile or style defines an individual's preferences in investment decisions, for example:
- 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 personal or social traits such as age, gender, income, wealth, family, tax situation...
- 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 s/he's 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
An investor profile is also shaped by the strategy the investor uses:
An investor profile is also shaped by the valuation method the investor uses:
- Capital accumulation
- Capital appreciation
- Ethical investing
- Financial economics
- Global assets under management
- Growth investing
- Index investing
- Investor relations
- Quality investing
- Return on investment
- Socially responsible investing
- Stock investor
- Stock profile
- Value investing
- perso.orange.fr, investor types
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