Understanding three categories of investors

Practice Management

Understanding three categories of investors

Identifying characteristics of investors may lend clarity during periodic market volatility.

When helping your clients map their financial future, the path to accomplishing their financial goals depends on where they are, where they’re going and their overall personality. Investing, like climbing a mountain, is a journey each client approaches differently.  In many cases, your clients will fall into one of three categories – Speculators, Traders and Long-Term Investors.

For the vast majority, the long-term investors’ approach has historically proven most successful. Unfortunately, most popular media outlets have a short-term focus and deliver opinions for traders or speculators. This can create confusion for long-term investors and spur action at the wrong time.

For long-term investors, understanding each approach along with its pros and cons may lend clarity to periodic market volatility and hopefully influence portfolio moves in a positive way. 

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Three types of Investors infographic



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