Identify Your Investor Type to Make Optimal Financial Decisions

Updated: Jun 6, 2020

There are a number of critical success factors when it comes to investing, and most of these factors are specific to the investor themselves. This means that what may have worked out for your friend would not necessarily be viable for you. This is because every investor’s risk tolerance and goals are different. Investors also differ in terms of their investing time frame, strategies, and the types of assets that they deal with.

In this post, we will help you identify your investor type so you can make the most of your invested funds. Let’s look at some of the types:

Soon To Retire

This type comprises investors who are expected to retire from their jobs in around 5 to 10 years. You’d be surprised to hear that one out of every three Americans have less than $5000 saved for their golden years.The optimal financial decisions for investors belonging to this category is to invest in an IRA. IRA refers to an individual retirement account. Although you can get one for yourself at any time, it’s still better to start as early as possible. You can choose whether you want your IRA to based on cash or any other investment security such as precious metals.

Some of the most common examples of an IRA are Roth IRA, precious metals IRA, and 401K.

Business owner

Business investing isn’t the same as private investing. One of the most common investment objectives for any business owner is making use of the excess funds that the company has and generating cashflow to be used for the business’s long-term benefit. Most businesses also invest because its not safe to accumulate too much cash in the office’s drawer.

Most businesses usually buy out a considerable number of common shares in another company in order to get voting rights and have a say in the managerial decisions of that company. Compared to private investors, business investors trade in bulk. Business owners also make sure that all their investments are insured so the partners and other stakeholders can be sure that their funds are not going to go into vain.

Business seller

Most business owners sell off their companies either when the offering is no longer in demand or the business is no longer profitable. Once the company is sold, business owners are faced with a common question of what to do with the lump sum amount. The best way forward is to invest!

This investor is in a different position than the one previously discussed because business sellers have more funds than business owners, and they can therefore, make bigger investments. Even the asset allocation in this case be quote diverse. Most business sellers try their best to strike a balance between stocks and real estate to benefit from both capital gains and share price appreciation.

Learn how to start investing in stocks Raleigh NC to take your investment success a notch ahead! At US Stock Advisor, we are home to some of the most well-experienced Raleigh stock consultant who will teach you the basics as well as winning strategies. Contact us now.

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