Types of Investors. What kind of Investor are you?

Types of Investors!

Investors play a critical role in the running of a company starting from humble beginnings to ultimate success. Every investor has a different style that helps them plan their own investments, build strategies and make rational decisions based on their analysis. There are different types of investors based on various investment styles that can prove beneficial for your company.

Types of Investors

Personal Investors

These kinds of investors usually include family, friends and networks that help with the initial funding. These investment helps to demonstrate your commitment towards the business to the potential investors, employees and other clients. Also, personal investors typically reach out to their close ones since they develop trust over time.

Always be sure to review the investor documents to avoid any issues in the future.

Types of Personal Investors

    • Automatic Investor

As the name suggests, these investors set everything related to their investments on autopilot. These investors don’t put much thinking or effort into their investments and the contributions towards their investment funds get deducted from their paychecks. This automation can be a great tool to grow your portfolio with a minimum effort but can also leave you exposed to low-performing and higher fee investments. It’s good practice to check in on your portfolio once or twice a year to keep your portfolio on track.

    • Daily Dow Watcher

These investors are constantly speeding and they don’t allow anything to go over their heads. Being a Daily Dow Watcher can be very depressing and stressful due to constant fluctuations in the stock market. It is not a good idea to glue to Dow’s daily performance and news, but checking in on the stock market and your investment portfolio quarterly is probably more than enough.

    • Active Trader

Active Traders are nerds of the investing world. They are very well informed about business trends, follow economic data, and reads news and business articles which act as their basis for trading judgements. Being an active trader requires a lot of practice. It is essential to time trade correctly to mitigate the risk of losing a huge amount of money. This trading approach is costly due to high transactions fees and calls for a lot of time commitment. Therefore, buying good stocks and holding them for a longer period of time is a better approach to make money.

    • Conscientious Investor

These are principle-based investors that restrict themselves to invest only in what they believe. For instance, an environmentally conscientious investor will not invest in a company that does not support an eco-friendly manufacturing process since it doesn’t align with the investor’s principles. Although this type of ethical investing might yield lower returns, conscientious investors tend to value their morals more than their money.

    • Real Estate/Property Investors

This group of people believe in investing in real estate, collectibles, gold, and maybe even bonds. They do not favour the volatility of the stocks in the stock market and would rather stick to something that they have control over. First-time stock investors are relatively better off and safe while starting with investing in large-cap value stocks.

    • Bargain Investor

Bargain stocks are typically stocks trading at low prices that don’t reflect their intrinsic value in terms of fundamentals such as earnings, cash flow and low debt. These investors look carefully at P/E ratios to check the share price relative to earnings per share when deciding what stock to buy. Investing in bargain stocks involves high risk since they can be totally worthless or bounce back making them profitable. This approach should involve deep research to understand why the price is so low before you decide to buy it.

    • Loyal Investor

These investors buy an unreasonable amount of stock from an individual company. It can involve trendy stocks like Apple, Shopify or it can be a stock of the company you work for. In either way, it can be super risky and leave you in a difficult situation during the downtime. Henceforth, it’s recommended to own less than 10%-15% of an individual stock to be safe.

    • Portfolio Tweaker

The portfolio tweaker does not trade actively but does fine-tune its portfolio very frequently by making multiple transactions in the funds to get desired balance between large-cap, mid-cap, small-cap, foreign, domestic, growth, value, and bond investment categories. While it is good to make changes in your portfolio, it might not be a good idea to focus on conserving a certain balance and ignoring the overall return.

Angel Investors

Angel Investors are the individuals that are willing to invest in new companies with the potential for growth. These individuals have an earned income that exceeds $200,000 annually or has a net worth that exceeds $1 million. They often bring in huge networks and wealthy experience from the industry. They might take a non-executive position within your company, providing a sounding board and source of support throughout the good and bad times. The demands of these investors are high due to what they bring to the table but they can also be one of the most impactful ones for the business.

Venture Capitalists

Venture capitalists are private equity investors with an equity stakeholding that provides capital to companies exhibiting high growth potential. These individuals provide capital (around $10 million) to the companies only after they show a significant amount of revenue.

Now that you know what are the types of investors and how they differ; tell us in the comments, What Kind of Investor do you think constitutes the Junior Mining Sector?

Follow us for more such content with a series of investment tips and knowledge for investors. Also, check our video on Top 5 Reasons to Invest in Junior Mining or read a blog on What is Junior Mining?

 

Happy Investing!

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