What Sort Of Investor Are You?

Investing your money is certainly a game. We are all taking a gamble with our money when we speculate on where we are going to invest and we do so in the hope that we are going to make some decent money at some point in the future. Let's face it, if this wasn't our end objective why would we bother to invest.

However, there is more to an investment than just speculating where to put your money and waiting. There is the journey and lots of people tend to ignore the fact that to make wealth you have to experience a journey. You need to go on a trip and that trip is full of many surprises and lots of ups and downs.

The Cool, Calm, Controlled Investor

If you are a calm, cool and collected investor you are prepared for your journey. You know and understand that you will have good days, weeks, months and years and you also know and understand that you will have bad days, weeks, months and years. But you will be prepared for this and accept this. You are focused on the end result. During turbulent times you stay calm. When the boat is rocking and you don't jump overboard. You hang on to the side and appreciate it when you come back into calm waters.

You hang on to your investments. Any short term gains and losses that are experienced throughout this journey are less relevant to you. You don't sell when you have made a few dollars to quickly reap a short term profit and you don't sell when you see your value dropping in bad times. You expect this to occur and you remain strongly focused on the benefits you will see when you achieve your end result and the wealth you will have one day down the track.

The Stressed, Anxious, Panicked Investor

If you are like a lot of people though, you find it very hard to remain cool, calm and controlled when you invest. Despite your best intentions, the slightest movement in the price of your investment sees you anxious to sell and to take the profits from any short term gains or to take flight and pull out after experiencing some short term losses. You are now focusing purely on today and have forgotten about your longer term plan and the journey you are taking to build up your wealth for the future.

Unfortunately there are dangers to these sorts of knee jerk reactions. People who have been through an unpleasant investment experience and lost money, generally retreat away from wealth creation all together. Doing this means they miss out on future opportunities as they won't have their money invested today ready to build wealth in the future to meet their long term goals. They also carry around a lot of negativity telling everyone they meet that investing is all too hard and too dangerous.

People who have made quick money are also in danger. Their expectation of investing is all sweet and rosy. They are likely then to make irrational decisions and take greater chances with their money in the expectation that their previous experience will be repeated. The danger with this is investment journeys aren't all uphill and these investors won't be prepared for the falls when they come along. They are too focused on today and making money overnight rather than remembering they were on a journey today to make wealth for tomorrow.

What sort of investor are you?

Are you able to ignore your journey to making wealth and ride out the good and bad times? Do you tend to focus on the short term or the long term? Do you count your losses / gains regularly? Do you forget your end goals and what it is you set off to achieve or do you remain focused on these? You can see it makes a huge difference if you are prepared for your journey and can understand the sort of experiences you will have as a long term investor.