Sunday, 19 November 2017

3 Different Investor types – Which is Best?

By Raviraj Parekh

Last Sunday I have visited my friend and we had discussion about Investments and Investors. Our discussion points were –
  • How different type of people does investment and what are investor types?
  • Why only few investors make more money than other?
  • What it takes to be a true investor?
Well after long debate we could make out three different investor types.

Different Investor Types

Type-3 investor

Type -3 Investors are not financially educated or sound in terms of finance. They often seek advice from friend, relatives for investment. These investors are from usually job oriented mindset and they make investment from retirement & money saving prospective.

They don’t know much about investment & finance and they have to rely on the advice of so-called experts.

What do you think Type-3 Investor can become financially free ever?

Type-2 investor

Type-2 Investor are bit aggressive they take interest in finance and often ask question before doing investments. These questions are like:-
  • Where do you think I should invest my money in?
  • Do you advice to buy real estate?
  • I have few share of XYZ company should I sell them?
  • Which stock I should buy for 5 year prospective?
  • Everyone advice to diversify portfolio what do you think?
Type-2 Investor take advice from professional experts or domain expert before making investment.Type-2 investor should interview several tax advisor, financial planners, stock brokers and real estate experts before deciding anything. Type -2 investors must see that investment advice is genuine and not given only to earn commission.

High income employees and self-employees fall in this category because they have less time to look for good investment opportunity.

Type-1 investors

Type -1 investor’s opportunist they are always looking for good investment opportunity. Types -1 Investor are smart and they know every aspect of investment and asset class. Examples of type -1 investors are ‘Rakesh Jhunjhunwala’ or ‘Warren Buffet’.

Type -1 investor are very good at number. They do lot of research before making investment. Type -1 Investor are very successful in terms of investments.

What type of investor are you?

  • In order to know what type of investor you are you have to ask simple question.
  • Do I have full knowledge about asset class where I am investing money?
My investment decisions are based on what?

If you do not carry enough knowledge about finance and often take advice from friends and relatives you are in Type-3 investor.

While doing investment if you take advice from financial planners, stock broker or any professional experts than you can consider yourself as Type-2 Investor.

If you are independent in terms of doing investment after gathering advice from expert & after carrying proper analysis and study you are Type -1 Investor.

Of course you need lot of financial education and network of financial expert in order to become Type-1 and Type-2 Investor. You should start working in that direction become financially independent.

Quote for the day

"Faith is reacting positively to a negative situation." - Robert H. Schuller

Saturday, 18 November 2017

7 Errors Traders Make in Bull Markets

By Steve Burns

Here are the seven most common errors traders make in a bull market.
  1. They wait for a correction to get long that never happens. So they end up missing a big part of the up trend.
  2. They do not get long with a big enough position size or enough leverage so they end up underperforming the market.
  3. They do not buy the small dips when they get a chance.
  4. Perma bears do not believe in the bullish move higher so they sell short losing money in a market where it should be made easily by being long.
  5. Some fundamentalists think the market is too expensive so they stay in cash missing a strong up trend as they wait for buying opportunities at better values.
  6. When the dip they were waiting for finally happens they are too scared to buy it and they then begin to fear that the market will crash.
  7. Instead of making money too many get obsessed with calling a market crash because they believe the market prices are too damn high.
The best strategy for a bull market is to not fight it but instead sit back and enjoy the ride.

Quote for the day

"Every great man, every successful man, no matter what the field of endeavor, has known the magic that lies in these words: every adversity has the seed of an equivalent or greater benefit." - W. Clement Stone

Friday, 17 November 2017

Colombo Stock Exchange Trade Summary 17-Nov-2017

Quote for the day

"Ability is what you're capable of doing. Motivation determines what you do. Attitude determines how well you do it." - Lou Holtz