What’s Your Investing Personality?

Posted on: April 21st, 2010 by

Investing - Broker - Rockville, MDOne of the most important investment decisions you have to make has nothing to do with choosing stocks, bonds, or mutual funds; its about choosing the right type of broker for your individual needs.  There are four main types of investing personalities: individual investors, reliant investors, short-term investors, and day traders.  To choose the best broker for you, you must first determine which of these personalities most closely resembles you.  Individual investors, also known as “retail investors”, don’t require any special assistance or advisory services.  They do their own research, select their own stocks, and know how to efficiently place their orders online.  The main priorities for the independent investor are fast trades and low commissions.

Reliant investors generally require some assistance when selecting a prospective investment.  They require a broker capable of individualized assistance and advice.  Obviously, more services means higher commissions, but it may be worth it, especially if you are just starting out.

Short term investors, or traders, are not the same as day traders.  Depending on the type of security, a short-term position can range from a few hours to a few months.  For the most part, short term traders require access to superior research information, as they require little to no assistance from a broker.  Because these investors are attempting to profit from the relatively short-term movements in a security’s price, they are more concerned about getting the best possible execution price than the long-term investor, but not as concerned as the day trader.  They like fast order execution and, obviously, the lowest commissions.

Day traders are more experienced and tend to hold their positions for a very short period of time, from minutes to hours, and make numerous trades each day.  As a result, day traders value order fulfillment speed and trade execution.  Because they tend to be self sufficient and place many trades daily, they can demand extremely low commissions.  But because they need to monitor the prices of stocks constantly, live quotes are very important, and the tools for this may come at a cost to that investor.

Every successful investor needs to have the proper tools for the “trade”.  That first begins with determining what type of investor you are and then choosing the right broker.  Not every broker is perfect for everyone; choosing the right one can mean the difference in your retirement plan.



  1. Tag Cloud
  2. Blog Home