What style of investor are you?

The Preserver

A preserver is an investor focused on financial security and wealth preservation, rather than risk-taking for growth.

They guard their assets, taking losses seriously. Deliberate in decisions, they may struggle to act due to fear of making wrong choices or taking excessive risks. They prefer maintaining the status quo, obsessing over short-term performance, especially in downturns, and worrying about losing prior gains. This mirrors their cautious approach in work and personal life.

Older investors often align with preserver behaviour. Age emphasises cash flow certainty, directing wealth towards family and future generations, like education and homes. Emotion, not cognition, dominates their bias.

The Follower

A follower investor is passive and often lacks interest in personal finances or investing. Furthermore, this type of investor typically does not have their own ideas about investing - or does not want to. Rather, they may follow the lead of their friends and colleagues - or whatever general investing fad is popular - to make their investment decisions.

Often their decision-making process is without regard to a long-term plan. One of the key challenges of followers is helping them how to refrain from overestimating their risk tolerance. An investment may appear so compelling that they jump in without considering the risks. Advisers need to be careful not to suggest too many "hot" investment ideas; followers will likely want to pursue all of them.

The Independent

An independent investor has original ideas about investing and likes to get involved in the investment process. Their unconventional views sometimes clash with long-term plans. They analyse, think logically, and act decisively, embracing risk for rewards. Despite their strengths, bias can hinder them.

They might rush into decisions without proper research, overestimating their understanding. While they're comfortable with risk, admitting mistakes is hard. Independents research extensively and collaborate with advisers, valuing their own ideas. They grasp financial language and delve into investment specifics.

Unfortunately, some are prone to biases that can torpedo their ability to reach goals. For example, they may act too quickly, without learning as much as they can about their investments before making them. Independents are realistic in understanding that risky assets can, and do, go down.

The Accumulator

The accumulator is an investor who is interested in accumulating wealth and is confident that they can do so. These investors have typically been successful in some business pursuit or career and believe in themselves enough that they will be successful investors.

Accumulators seek wealth confidently and adjust portfolios based on market trends. They believe in their abilities and often prefer control over decisions. They embrace risk, determined to win big, unlike preservers or followers. Unlike individualists, they delve into details. Biases can hinder them, like overconfidence, leading to control illusions.

High risk tolerance shifts when losses hit, unsettling their confidence. Close adviser relationships can be challenging due to their independent decisions. They are often tempted to trade excessively and preferring high-risk investments. Some disregard diversification and allocation principles, staying hands-on.