Investor Type Guide

What Kind of Investor are You?

Please read each question carefully and select the answer that best describes your response to each of the following questions. If you need to change a response you will need to hit the clear button at the bottom of the screen and start from the beginning, or calculated results will be inaccurate:

1] Which of the following would worry you the most?

My portfolio may lose value in one of every three years.

My investments won't stay even with inflation.

I won't earn a premium over inflation on my long-term investments.

2] How would you react if your stock portfolio fell 30% in one year?

I would sell some or all of it.

I would stop investing more money until it came back.

I would stick with my investments plan and consider adding more to stocks.

3] You've just heard that the stock market fell by 10% today.

Consider selling some stocks.

Be concerned, but figure the market is likely to go up again eventually.

Consider buying more stocks, because they are cheaper now.

4 You read numerous newspaper articles over several months quoting experts who predict stocks will lose money in the coming decade. Many argue that real estate is a better investment. You would:

Consider reducing your stock investment and increasing your investment in real estate.

Be concerned, but stick to your long-term investment in stocks.

Consider the articles as evidence of unwarranted pessimism over the outlook for stocks.
5] Which of the following best describes your attitude about investing in bonds as compared with stocks?

The high volatility of the stock market concerns me, so I prefer to invest in bonds.

Bonds have less risk but they provide lower returns, so I have a hard time choosing between the two.

The lower return potential of bonds leads me to prefer stocks.
6] Which of the following best describes how you evaluate the performance of your investments?

My greatest concern is the previous year's performance.

The previous two years are the most important to me.

Performance over five or more years is most significant to me.

7] Which of the following scenarios would make you feel best about your investing

Being in a money-market fund saves you from losing half your money in a market downturn.

You double your money in a stock fund in one year.

Over the long term your overall mix of investments protects you from loss and outpaces the rate of inflation.

8] How much experience to you have investing is stocks or stock funds?

None

A little

A comfortable amount.

9] Which of the following statements best describes you?

I often change my mind and have trouble sticking to a plan.

I can stay with a strategy only as long as it seems to be going well.

Once I make up my mind to do something I tend to carry through with it, regardless of the obstacles.

10] Which of the following statements best describes you?

Over 54

39-53

Under 38

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Investment Types

Conservative:
An individual seeking the preservation of principle as their primary concern would be considered a conservative investor. Someone who is more concerned with the “return of their money” would fit this investment type. Conservative investors are comfortable with a return that is comparable to the rate of inflation, or slightly better, with little or no fluctuations in annual return.

Moderate Growth:
A moderate investor is seeking to stay ahead of the annual increase in the cost of living (inflation) without incurring huge fluctuations in annual returns. The preservation of principle is quite important, but the ability to grow their investment faster than inflation is equally important. A moderate investor is willing to invest in equity orientated investments (stocks or stock mutual funds), but not to the point that their total portfolio consists of stock orientated investments.

Aggressive Growth:
An investor seeking to maximize the accumulation or growth of their investments with little concern toward fluctuations in annual returns would be considered an aggressive investor. This type of investor would be willing to invest 100% of their portfolio in stocks, or stock mutual funds. Aggressive investors will typically want a much higher annualized return than the moderate or conservative investor, and is willing to take on the added volatility to achieve their goals.