Investor Profile
Investor Profiles
When it comes to investing, it is crucial to determine one’s risk tolerance, expectation for capital appreciation, income requirements, preferred portfolio volatility, time horizon, and of course, the expected overall potential return. These characteristics are generally summed together to form the investor profile of a particular investor. It will allow an individual to make clear of their goals and objectives, determine their comfort level with risks and uncertainties, as well as other valuable information necessary to make wise investment decisions in the future.
There are six standardized investor profiles described in the article, “The things that keep investors smiling”. They are listed as: ‘aggressive growth investor’, ‘growth investor’, ‘balanced investor’, ‘conservative investor’, ‘income investor’, and ‘secure investor’. Depending on the type of investor an individual is categorized in, they may have certain expectations for their portfolio and conform to a certain investment strategy. Knowing the type of investor you are will give financial advisors a better idea of your situation, in order to fulfill your personal financial goals and objectives.
An aggressive growth investor is one that has a high level of risk tolerance. Their goal is to maximize their capital appreciation by investing in stocks and mutual funds which will give a greater return in the long run. They do not depend on fixed income investments, thus they will have a minimum income requirement. Their portfolio volatility may be aggressive in a short term, but will reveal growth in the long run. This type of investor has a long term investment horizon, and expects a high overall potential return.
A growth investor is similar to an aggressive growth investor, as they too have a high level of risk tolerance. They focus on capital appreciation, by investing in securities with a long term positive growing trend and significant volatility. They require little to no income
When it comes to investing, it is crucial to determine one’s risk tolerance, expectation for capital appreciation, income requirements, preferred portfolio volatility, time horizon, and of course, the expected overall potential return. These characteristics are generally summed together to form the investor profile of a particular investor. It will allow an individual to make clear of their goals and objectives, determine their comfort level with risks and uncertainties, as well as other valuable information necessary to make wise investment decisions in the future.
There are six standardized investor profiles described in the article, “The things that keep investors smiling”. They are listed as: ‘aggressive growth investor’, ‘growth investor’, ‘balanced investor’, ‘conservative investor’, ‘income investor’, and ‘secure investor’. Depending on the type of investor an individual is categorized in, they may have certain expectations for their portfolio and conform to a certain investment strategy. Knowing the type of investor you are will give financial advisors a better idea of your situation, in order to fulfill your personal financial goals and objectives.
An aggressive growth investor is one that has a high level of risk tolerance. Their goal is to maximize their capital appreciation by investing in stocks and mutual funds which will give a greater return in the long run. They do not depend on fixed income investments, thus they will have a minimum income requirement. Their portfolio volatility may be aggressive in a short term, but will reveal growth in the long run. This type of investor has a long term investment horizon, and expects a high overall potential return.
A growth investor is similar to an aggressive growth investor, as they too have a high level of risk tolerance. They focus on capital appreciation, by investing in securities with a long term positive growing trend and significant volatility. They require little to no income
Bibliography: * Yew, Madhavi Acharya-Tom. "The Things that Keep Investors Smiling." Toronto Star 27 Jan. 2010, B7 sec./>. * "Your Investor Profile." Investor Profiles and Corresponding Portfolio Approach from CIBC. 15 Feb. 2013 <https://www.cibc.com/ca/advice-centre/growing-your-wealth/investor-profile.html>. * "Friday Feb 15." Investopedia – Educating the world about finance. 15 Feb. 2013 <http://www.investopedia.com/>. * "ING DIRECT Canada: Investor Profile." ING DIRECT Canada: Investor Profile. 15 Feb. 2013 <http://www.ingdirect.ca/en/mutualfunds/investorprofile/index.html>. -------------------------------------------- [ 1 ]. (footnote continued)