What Type Of Investor Should I Be

Getting started in the business of investing is much easier than it used to be. So is improving your returns if you already invest. No longer is the field restricted to the wealthy or large financial institutions. More and more these days every day people like mums, dads, students and even children are trying their hand at what used to be the exclusive playground of the rich. However before delving into what is a very exciting and potentially financially rewarding world you should assess what type of investor you actually want to be. If not you need to seriously consider what type of investment style would be best for your position. Types of investors The buy and holders of the community put their money into shares that they feel are good value and hold them for expanses of anywhere between 1 and 50 years. This investment style is most suited to people who are long term orientated by nature, not looking for a quick profit and have an eye for good companies. The most famous proponent of such an approach is the world’s second richest man, Warren Buffet, so you could say that it isn’t such a bad style. Day trading is the complete opposite of the buy and hold approach and involves individuals who buy and sell shares in a very short period generally within the same day. If you have a lot of time and are prepared to watch market movements very closely then this approach may be for you. Generally there are two schools of thought, one being fundamental and the other technical. You will always find people pushing one or the other but it makes more sense to incorporate a blend both. Fundamentalists tend to look at company profits, management direction, future plans/growth prospects, the economy as a whole and such like company and economic factors. While those with a mathematical or scientific background might look at share price charts employing various technical analysis techniques, ratios, indicators and trends in order to identify which shares they want to look at further. For example a chart that has all the indications that a share is going to be a good choice for the future is useless if the company is going to file for bankruptcy. In other words how much you are willing to loose. Investors come in many forms and there is no right or wrong way. Different things work for different people. It is vital that you decide which method best suits you and that you stick to this method.