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What Kind of Stock Trading Investor Are You?

December 25th, 2008 by Lauren Thompson

by katie George

For any stock market player to have good success in his or her stock trading efforts, such one must as a necessity have a clearly defined objective. Just like every traveler. All traveler must have a destination, and when he arrives at the predetermined destination(goal), he disembarks. But every bus stop is the destination of any traveler without a destination.It’s therefore imperative that for an investor to optimize his investment trading in the stock market, such a one must have a deep understanding of what type of investor he or she is.Having this understanding helps to articulate our Investment goals and plans toward realizing our overall financial objectives.

There are basically four classes of investors. These are:

Passive Investors

These classes of investors employ their hard earned money to acquire shares, stocks, or any other investment and expect excessive returns in terms of dividends and bonuses without doing anything thereafter. Perhaps, this group of investor does not have time to nurture and monitor their investments or lack the basic information required of a stock market player. These types of investors are more at home with mutual funds investments. They should also look at private placements, initial public offers, and normal public offers with good fundamentals. If possible engage a good stock broker and pay him well.

Portfolio Builders

This group of investors builds their portfolio gradually for the sake

of the future. They believe in the aged long saying that “What You Save, Will Save you”. They tie their investment plans to their retirement program. They are always on the watch out for growth stocks (i.e, rapid growing companies with good share’s future prospects), and blue clips for investment opportunities. If well done, they can take up positions in the board of such companies depending on the volume of their holdings. Call them pensioners but their generation never lacks.

Active Investors

This class of investors trade with their investments. They look out for undervalued situations. They buy bargains-buying companies when they are under priced. They buy equities at low price and resell at a higher price. The difference between the sell and buy price then becomes their margin (profit). This group of investors can make obscene profit from their investments. These are the millionaire group and only a few have been able to enter into this wealth realm via stock market trading. Since it is an established fact that the stock market investment is information driven, it therefore behoves that for this group of investors to do well, they must be in the forefront seeking relevant stock investment information

Poverty Victims

These are the people who engage their money in investments that yield little or no profit. They are risk averse. They are characterized by fear of loss, feeling of i don’t earn enough to invest, slothfulness, and wickedness. They blame every body and government for their lack luster predicament. Just like the story of the unprofitable servant, the best that would happen to these group of investors is that even the small that they have will taken from them and given to the rich.

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