Different people invest with different strategies
or no-strategies. This article describes in more details different
behavioral patterns of investors of four distinct types.
When trying to make observations of types of
investor behavior, this QuaSyLaTic invariably uses his own investment
philosophy and strategies as reference for making observations. Hence
the set of characteristics and attributes on what constitute a focused
and disciplined investor to create wealth is first described.
Characteristics and Attributes of Focused &
Disciplined Investor
- Taking
investment as a serious study, research and monitoring work not a
casual game with hear-say and hope for the best.
- Understand
investment is a matter of timing, not blindly trusting in long term
- Invest
in market instruments that have potential to bring the best return,
not using diversification to mix up good apples with bad fruits.
- Study
risk / reward carefully and prepare to exist if faced with high
uncertainty to protect acquired gain, or preserve capitals or cut
loss.
- Make
research on future scenarios of investment performance with
monitoring to validate the assumptions and do not deal with
uncertainty or unknown.
- Take
care of every dollar of investment to ensure its value creation.
With the above as criteria, four distinct types of
investors are observed.
Type 1 : Investors who subscribe to
the above stated strategies or approach but do not have the interest to
study and take up the discipline. Or they do not have any preference for
any particular strategy or approach. They prefer to let “consultant
cum investor” handle everything and their fund, as long as they are
being kept informed. Most important of all, they understand the nature
of investment risks and blame no one.
Type 2: Investors who also let “consultant
cum investor” handle everything and their fund, but they want to learn
the above described strategies and approach, with the views that one day
they can handle on their own investment. They also understand the nature
of investment risks.
Type 3 : Investors, who has their own
strategies and willing to put in hard work to monitor and validate their
assumptions in order to grow their wealth. They may have different
strategies or approach from the above. This QuaSyLaTic will network with
these people for networking and exchange of ideas.
Type 4 :
Investors who do not subscribe to the above stated strategies and
approach. Usually they do not do serious research and monitoring work.
They do not show consistency in the investment decision. They use
general investment ideas as strategies, with hope for the best. They may
not have the stomach for investment losses. They don’t cut loss and
hope for the best into the future.
