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Five types of investors you should not become at any cost

A lot of people would argue that a versatile, dynamic and complex market would make investors adapt and evolve and that me creating categories is like a moot point. I totally agree!

It is true that unique behaviors and strategies are the ones that help you excel. However, the purpose of this article is primarily to make you aware of common bad practices and behaviors that can cost you time and above all money.

The stubborn investor: The first category is the long term “active“ investor or the one that prefers getting personal involved. He is seeking for undervalued businesses or indebted ones that have potential. He buys cheap and he is investing money and above all time to turn his investment into a profitable one. But he has a flaw! If things don’t turn out to go as planned, he takes it personally and refuses to let it go. Unfortunately, bad investments are by far more than the good ones and chances are that if you don’t sell early, you might not be able to sell at all.

The gambler: If you are a gambler, chances are that you will have hired a couple of half-informed traders that can only help you feel secure. But are you secure? The truth is that your trader is having fun gambling for free. It’s you that bears the risk and again chances are that you will lose.

The curious investor: The curious investor has thirst for knowledge. He is also characterized by lack of trust towards others and prefers to do things by himself. He believes that the financial markets are complicated but if you spend time, you will learn. He also believes that he is a fast learner, faster than others. All of above can be true but it is also true that lessons usually cost. So how much are you willing to pay in order to learn?

The visionary investor: The visionary investor enjoys dreaming of success. But, he spends more time dreaming than learning, investing and adapting. Unfortunately, dreaming is neither profitable nor loss making. The visionary investor should analyse and dreaming less and acting more.

The undecided investor:The undecided investors wants to invest in everything and be a part of everything. He is unable to formulate a single strategy, optimize it, tweak it and improve it. The result is that this investor has a high risk of forming a mediocre strategy that took time but is neither profit making nor loss making.

Markets are moving and changing fast. You need to learn and adapt fast too. Being successful means being unique and innovative. You will be more successful if you become an innovator rather than a follower.

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