An investor profile or style defines an individual's preferences in
investment
Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...
decisions, for example:
*
Short-term trading (
active management) or long term holding (
buy and hold)
*
Risk-averse or risk tolerant / seeker
* All classes of assets or just one (
stock
Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...
s for example)
*
Value stock,
growth stocks,
quality stocks, defensive or cyclical stocks...
* Big cap or small cap (
Market capitalization) stocks,
* Use or not of
derivatives
* Home turf or international diversification
* Hands on, or via
investment fund
An investment fund is a way of investment, investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These ad ...
s
What determines an investor profile
The style / profile is determined by
Objective traits
* Objective personal or social traits such as age, gender, income, wealth, family, tax situation, opportunities.
Subjective attitudes
* Subjective attitudes, linked to the temper (emotions) and the beliefs (cognition) of the investor.
Balance between risk and return
An investor's style is shaped by his or her sense of balance between risk and return. Some investors can tolerate greater risk to have greater return. Some investors want less risk and are content with a reasonable return.
* Generally, the investor's financial return / risk objectives, assuming they are precisely set and fully rational.
Areas of focus
An investor profile is shaped by the area that an investor chooses to focus on; such as:
* stocks or bonds,
* technology, commodity, or real estate
* small-cap or large-cap companies
Investment strategies
An investor profile is also shaped by the strategy the investor uses:
*
ethical investing
*
growth investing
*
index investing
*
quality investing
*
value investing
Valuation methods
An investor profile is also shaped by the valuation method the investor uses:
*
fundamental analysis
*
technical analysis
*
quantitative analysis
See also
*
Bielard, Biehl and Kaiser five-way model
*
Capital accumulation
*
Capital appreciation
*
Ethical investing
*
Financial economics
Financial economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on ''both sides'' of a trade".William F. Sharpe"Financial Economics", in
Its co ...
*
Global assets under management
*
Growth investing
*
Index investing
*
Investor relations
Investor relations (IR) is a "strategic management responsibility that is capable of integrating finance, communication, marketing and securities law Regulatory compliance, compliance to enable the most effective two-way communication between a com ...
*
Quality investing
*
Return on investment
Return on investment (ROI) or return on costs (ROC) is the ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favorab ...
*
Saving
*
Socially responsible investing
*
Speculation
*
Stock investor
*
Stock profile
*
Value investing
References
External links
perso.orange.fr investor types
Investment
{{investment-stub