Types of Investors In Stock Markets - Australia

by John Smith Stock Market Investor

Investing is the act of allocating and managing funds to an asset/diversified portfolio with the goal of generating income. The investing technique is not only for wealthy people; anyone can start investing with even a small amount.

Kinds of Investors

The investors engaged in the investment activity varies according to their tolerance to risk, investment knowledge, investing timeframe and many other aspects.

Aggressive Investors

Those who actively follows the stock market and intends to engage in every aspect of the investing experience are aggressive investors. Such investors spend a substantial amount of time in studying various aspects (fundamental versus technical) of the stock market to figure out the possible movement in the stock before the other investors could realise. These investors are always looking for new investment ideas and may participate in advanced investments like Forex (foreign currency exchange) and options trading.

Submissive Investors: Unlike aggressive investors, these investors do not try to look for maximum possible gains at all the time. They are also termed as the ‘buy and hold’ investors that hold the investment for a very long time. They try to maximize returns by reducing buying and selling and holding a customised portfolio selected for their needs. Such investors do not keep a watch on the day-to-day decisions of the companies’ stocks they have invested in, relying on the controlling stakeholders and the management of the companies.

Risk Averse Investors: Another category of investors is the risk averse investors that prefer choosing the low-risk option while selecting between two different investments. Out of a higher return investment with unknown risks and a lower return investment with lower risk, such investors go for low return investments. These investors might choose a risky investment if it is assured by a potential for greater returns.

Risk Lover Investors: In contrast to the risk averse investors, risk lover investors are willing to take higher risks in order to earn higher returns while investing. A risk lover investor moves towards extremely high potential pay-outs’ investments even if it comes with a potentially greater loss. Such investors are willing to put their investments at stake to a certain extent if there is a possibility to get growing returns in an investment instead of stable and stagnant returns.

Reasons to Invest in the Stock Market:

There are multiple options available to a person looking for investment including stocks, bonds, bank products, annuities, options, ETFs, real estate and much more. However, investment in the stock market is considered to be the only way to build your real wealth.

Why do people take the route of the stock market, which is riskier than other investment choices, to invest their hard-earned money? Read complete article Here