Invest Right For Your Trade Type 

 

Knowing your trade type will help you in planning your investment better. Many have adopted a mismatch investment strategy that differs from their personality, inner motivation and life stages.

Investing is not just investing into a few good companies and hold onto them forever. If your current portfolio, more than 50% of it is in the red despite being a value investor, you should consider profiling yourself to find out which investor's type you belongs to.  

 

The 4 types are:

  • Long term investor 

  • Short term investor 

  • Short term trader 

  • Intra day trader 

How to do this quiz?

 

Answer the following 10 questions, do not over think and choose the option that will speak to you the most. This quiz should take less than 5 minutes to complete. Many were surprise to find out the trade type they actually belong to. Understanding your profile type, it will help you to be more structure in the way you think with the trade type analysis provided:

 

a) what type of investment opportunity you should be focusing on

b) how to make plan for it

c) how long you should stay in your investment 

d) what are the financial instruments you should adopt

e) how should you manage it 

Do note, the trade type analysis provided, showcase what each trade type is typically doing; professionally. It may not represent you are currently managing it in that manner. However, you could reference it on how you can improve yourself.  Recommended to print the following quiz and the analysis.

Question 1 

   My overarching financial goal is to:

 

   a.  Make fat after-tax returns

   b.  Earn returns bigger than inflation

   c.  Keep safe from volatility

   d.  Be sure I keep hold of my money

   Answer (     ) 

Question 2

   If an investment fell 20 per cent, I would:

   a.  Promptly buy more

   b.  Cut some of my losses

   c.  Never thought of that question, just hold on

   d.  Panic and sell out

   Answer (     ) 

Question 3

   If an investment underperformed my expectations, I would:

 

   a.  Look to the next one

   b.  Acknowledge the risk of investment 

   c.  Feel disappointed

   d.  Feel devastated

 

   Answer (     ) 

Question 4

   I am mainly seeking:

   a.  Steep growth in my assets

   b.  Steady growth

   c.  Insulation from volatility

   d.  An income

   Answer (     ) 

Question 5

   I want and / or need an annual return of:

   a.  10% plus

   b.  8% to 9% 

   c.  5% to 7% 

   d.  4% or below 

   Answer (     ) 

Question 6

   I would rate my investment knowledge as:

   a.  I'm versatile to switch or cut loss to another 

   b.  I'm clued up enough 

   c.  OK 

   d.  I hope to only seek value  

   Answer (     ) 

Question 7

   I would rate my investment expertise as:

   a.  Top notch 

   b.  Pretty good  

   c.  Still exploring 

   d.  What's investment?  

   Answer (     ) 

Question 8

   I am age:

   a.  Below 30 years old  

   b.  31 to 45 years old 

   c.  46 to 65 years old 

   d.  65 years old and above  

   Answer (     ) 

Question 9

   I will keep working on my investment:

   a.  Indefinitely  

   b.  More than 10 years, but before my retirement 

   c.  Less than 10 years 

   d.  Less than 5 years 

   Answer (     ) 

Question 10

   I will retire in:

   a.  Never retire   

   b.  10 to 19 years from now  

   c.  5 to 9 years from now 

   d.  4 or fewer, or I already have 

   Answer (     ) 

Give yourself a score of each answer for all the above 10 questions:

4 points for each (a) 

3 points for each (b) 

2 points for each (c) 

1 points for each (d) 

Then tally your results 

Score:         0-16   

Classified:  Long term investor 

You are:      The "Conservative"

At this point in your life, you hate the prospect of losing money. Income investments such as property, cash and bonds will hold most appeal, and to a lesser extent high-yielding blue-chip shares.

Tips:

Keeping cash or hard assets may be considered, especially if your holding currency is a stable one. Stay on guard, your banker or broker may say you are under investing, but you know you are not, you are an investment strategist. Those cash holding, it is already a position, waiting to be deployed at an more appropriate time and investment opportunity.

Once you have invested, do not let short term (3 years and less) volatility or market stagnation causes you to waver on your decision for this long term hold.   

Score:         17-26   

Classified:   Short term investor

You are:       The "Moderate"

You are willing to accept muted returns if it means more protection for capital. Low-risk, low-return investments suit, and high-yielding blue chips may well be your favourite. Cutting losses is never quite an option as you view your holding as valuable and would like to "hold it forever". 

Tips:

Learn to identify the macro developments and study into market cycles will help you in making better choices. Since cutting losses is never quite an option, you may consider deploying derivatives to hedge or to protect your holdings during unfavorable market cycle or economy downturn.  

Score:         27-36   

Classified:  Short term trader

You are:      The "Entrepreneurial"

You can look through short-term volatility to the longer-term return potential. Growth assets like shares and derivatives will be your bag. You are sophisticated and versatile in deploying your basket of financial instruments, adapting well to the different market dynamics. You understand different financial instrument are designed for it's specified purpose - short term trader trade derivatives and longer term investor invest in stocks and shares. 

Tips:

If you are not quite there as what the above mentioned, you should be, dig in and learn the working mechanism and application of the different financial instrument. If you derived an opportunity, it's holding period is less than 3 months, for greater efficiency, your should consider dealing in derivatives only.

Score:         37-40 

Classified:   Intra day trader

You are:       The "Aggressive"

You enjoy volatility and for each entry, you will make plan for a measured or calculated risk. Trading the derivatives is definitely in your basket. Though your activity are very short term, you understand the power of compounding earnings, the risk / reward may be small in percentage according to your trading fund, but you enjoy seeing it grow and your target is for exponential growth.  

Tips:

If you are not quite there as what the above mentioned, you should be, dig in and learn the working mechanism and application of the different financial instrument. If you are feeling anxious of your open positions most of the time, likely, you have over traded in term of your quantum or contract value you have exposed. Your entry and exit should not based on how you feel, your emotion, but rather it is always based on set of triggers of structure or trading plan in place.  

Long term investor

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Short term investor & trader

Programme is for you

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This online learning is power-packed with many case studies covering various trading conditions for in-depth learning

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