Behavioural loss tolerance: Low to med.
Behavioural Loss Tolerance
Shows how much loss you can emotionally handle without making impulsive or irrational decisions.
Low
Medium
High
Your Investment Personality
The Methodical Builder
You try to make your own decisions in life, carefully going about things, having a certain degree of confidence about them, but also being careful, methodical and analytical. You thrive on structure and prefer predictable outcomes over taking impulsive risks. You sometimes over-analyze to try to time market tops or bottoms, and your risk appetite grows with your financial knowledge and technical skills.
Behavioural loss tolerance: Low to med.
Behavioural Loss Tolerance
Shows how much loss you can emotionally handle without making impulsive or irrational decisions.
Low
Medium
High
Strengths
Disciplined
Follows pre-defined rules and systematic strategies.
Research-driven
Makes investment decisions based on own investment knowledge or research.
Cautious
Thinks carefully before acting and avoids impulsive decisions.
Confident
Takes calculated risks and seizes opportunities that others might hesitate to pursue.
Skeptical
Does own research to verify new investment information or rumours before acting.
Optimistic
Expects a positive future one-year market return.
Weaknesses
Overcomplication
Creates overly complex portfolios.
Overly cautious
Struggles to quickly adapt to market changes due to over-thinking and may miss high-reward opportunities.
Rigidity
May resist adapting to new trends or strategies.
Analysis paralysis
Inability to make a decision due to overthinking or over-researching, which leads to delayed action.
Short-term focus
Prone to have short-term investment intentions due to over-optimization.
Your investment style is Passive investing
Here are some options often associated with this investment style:
Broad Market Funds
Track a wide range of stocks across various sectors, offering diversified exposure to the entire market with low costs and steady long-term growth potential.
Multi-Asset Funds
Investment vehicles that combine various asset classes, such as stocks, bonds, cash, and alternatives, to create a diversified portfolio.
Why?
Broad Market Funds capture the entire market trends without overexposing risks to a certain sector.
Watch out for...
Overcomplication of portfolio and chasing 'perfect' entry or exit points (I.e., Predicting market bottoms or market tops).
Ready to build your portfolio?
Define Your Future
Set clear, long-term goals (I.e., Retire at xx yrs old with $xx).
Invest Steadily, Grow Smart
Automate investments with Dollar-Cost Averaging into low-cost Broad Market Funds based on your investment horizon.
Stay on Track
Review your portfolio every six months - no more, no less.
The investor’s bookshelf
These are some independent resources for further learnings based on your personality.
A Random Walk Down Wall Street - Burton Malkiel
Encourages passive strategies to counter analysis paralysis.
Just Keep Buying - Nick Maggiulli
Teaches the power of compounding and wealth building with evidence and data-driven insights.
Trading in the Zone - Mark Douglas
Teaches market psychology and provides strategies for setting realistic trading goals and sticking to them.
