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What Kind of Investor Are You?

Investor, know thyself. See if you recognize yourself in any of the main risk control categories:

Conservative Investor

* I want my money safe at all times, and I don't want to lose any of it.
* Any decline in the value of an investment that I own concerns me.
* I'm uncomfortable with price volatility (i.e., changes in investment share prices).
* I want to minimize losses and fluctuation in the value of my investments.
* I like to invest in something safe that offers a fixed rate of return.
* I'm willing to give up higher rates of return in order to keep most of my principal intact.
* I prefer investments that provide regular income without much exposure to principal loss.

Moderate Investor

* I want my investment return to beat inflation by at least 2 percent.
* I select investments that have a moderate amount of volatility, yet offer the opportunity for rates of return higher than certificates of deposit or government bonds.
* Although a decline in the value of my investments concerns me, I can accept temporary market volatility in return for growth opportunities.
* I would like to increase the value of my investments moderately, with limited exposure to risk, and I am willing to ride out market downturns.
* I want a balanced investment mix and am willing to put up with some short-term fluctuation in value.

Aggressive Investor

* I like substantial appreciation opportunities, even though it puts my capital at high risk.
* Temporary market fluctuations do not concern me because maximum appreciation is my primary long-term goal.
* I expect a return greater than stock market indexes from my investments.
* I am financially able to accept some limited liquidity in my investment portfolio.
* I take calculated risks in order to ensure a potential for the highest return over time.
* I have the conviction necessary to hold on to my investment during those years when it could drop in value by 25 percent or more.

SOURCE: Rutgers University Co-Operative Extension

Published Nov 21 2006, 09:44 PM by moneycoach
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