Investor profile: What are they and how to find yours?
Personal finances
September 11, 2024
Knowing your investor profile allows you to make better decisions when investing, determine how much you want to earn, and assess how much risk you're willing to take. Let's find out your profile—join us in this weekly post!
Being born with a gift for investing is a myth. Just like personality, which matures and changes over time and through experience, any investor's profile will evolve based on the experiences they face.
We are confident that information empowers people, which is why at Hapi, today we’re sharing a special article: discover your financial personality to take the first step into the world of investments and start your journey toward prosperity.
An investment profile aligns with your personality style, adopting an investment method that guides you in managing your money.
Your investment profile is a classification of your financial personality that guides how you invest.
How is a financial profile created? Through a series of parameters built from experiences, let’s review them:
These include a series of characteristics such as:
Now that you know the characteristics that can shape your investment style, let’s find out which type of investor matches your personality:
Since it’s about self-knowledge, answer these questions, ideally writing down your answers as concretely as possible:
It’s no coincidence that time appears in two of these four questions, as it reflects our struggle against time. Do you know how much you should have saved by your age? We leave it to you as a curiosity.
After answering these questions as clearly as possible, you can move on to choosing the type of investor that suits you:
This is a personality type with the following characteristics:
Given these traits, the ideal investment lies in fixed-income products or what are known as fixed-term investments, where gains come from a fixed interest rate. Some examples are government bonds, investments in bank accounts, savings accounts, or certificates of deposit or fixed income.
They should also consider fixed-income ETFs (Exchange Traded Funds). What is an ETF? ETFs are also known as exchange-traded funds, allowing you to buy a basket of securities that can include stocks, REITs, fixed-income securities, commodities, equity securities, equity-like securities, among others. Due to their variety, there can be different types of ETFs and they form part of a key strategy for instant diversification—learn more here on the site!
Within this profile, we can identify two levels, depending on how independent you are in planning your investment strategy. Discover the characteristics of these two types of moderate investors:
This is a type of investor who likes to plan their investment strategy, with the following characteristics:
This is a profile that prefers to follow the popular investment plan, with the following personality traits:
While fixed-income assets were recommended for the conservative investor, the ideal investment for this personality is exploring and diversifying investments in variable-income assets. For example, buying government bonds, investing in index funds or ETFs, which are a kind of hybrid fund that combines an investment and a stock.
As you may have noticed, knowing about ETFs is crucial to start investing!
At Hapi, we call this profile the adventurous investor. This profile is more daring and exploratory, usually with these characteristics:
For this adventurous personality, a good investment is often the foreign exchange market, emerging markets, investing in futures, and high-risk debt. Here are some stocks that experts recommend for this profile:
However, make sure to research the company’s financial status before investing in it—make an informed decision.
ETFs and the risky profile can get along very well as they are tools that give you access to all types of assets available in the market. But they can also expose you to products you're unfamiliar with, or the type of leveraged ETFs can bring you high returns, but they require knowledge and experience.
What are Leveraged ETFs? Leveraged ETFs are a synthetic type of ETF that aims to replicate both the upside and downside behavior while increasing profitability by a factor, say double or triple, expressed as 2x, 3x, etc.
What do Leveraged ETFs rely on to replicate this behavior? They use the indirect replication method through swaps or contracts known as financial swaps.
The advantage of using a leveraged ETF is that it allows you to benefit from upward trends and achieve higher profitability thanks to the leverage effect, but it carries a higher risk and is usually recommended for investors with more experience, with solid knowledge, and of course, constant monitoring.
In conclusion, regardless of the investment style you choose, we also recommend working on emotional intelligence as a trait that influences all areas of our lives, a trait that will help you make conscious and responsible decisions when buying a stock. Are you ready to invest in the stock market?
Practice makes perfect! And if you're part of the Latin American region, you're no longer alone—let us help you: Hapi is a broker-dealer regulated by FINRA and the SEC, and with those guarantees, you can trust that your assets are insured for up to US$500,000 by SIPC.
To start investing, you need an easy and secure platform: Try the Hapi app to take control of your finances!
To close on a high note, here are three habits that can make you a great investor:
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All investments involve risk, including the loss of capital. Hapi offers self directed investment accounts for those investors who feel comfortable managing their own investments. For a full list of our disclosures, please visit our disclosures page.