What Type of Investor Are You?

By Jason Fittler

Misinformation is public enemy number one.

Our world is now so full of information it is difficult to stay focused on any one thing long enough to understand it. Media, publications, newsletters, emails, TXT and phone calls come at us at an alarming rate these days. There is always too much to read and not enough time.

On top of this, much of what we see, hear and read is wrong.

In my industry, I can read five different articles on the same issue and get five different messages. The same is true with advice, depending on whom you are speaking to; you may get vastly different answers.

So how do we wade through this maze of information to find the correct solution for you?

We are often tricked by very clever marketing that we need a tailor made solution just for us. In reality, there are normally only limited ways to solve any one problem.

As a Financial Adviser, it is my job to advise clients on the best way to reach their financial goal. Clients can normally be broken up into the following groups as to their approach to obtaining their goals.

1.  Fast and furious – these clients are normally in a poor financial position and are looking for a quick fix. They have been seduced by a story of someone they know who made lots of money doing something clever. 

2.  No risk – these clients have generally been stung by a bad investment and are now not wanting to take any risk. Unfortunately, their current position is as good as it gets. If you are not prepared to take risk then you will not move forward.

3.  Tax driven – the tax driven investor is focused on paying less tax. This the major focus when assessing any financial advice they receive. Saving tax is important but should never be primary focus.

4.  Short Term Investor – they are all keen at the start but pull their money out at the first sign of trouble or when they see something shinny to purchase. 

All of the above are very susceptible to good quality marketing and will fall prey to the fatal flaw of not getting enough of the right information at the start.

Investing is about one thing... information.

The investor, which does the best long term in the market, is the Educated Investor.

The Educated investor spends time to filter through all of the misinformation and marketing. They spend the time to understanding what it is they want and what it is that their adviser is recommending to them.

Now do not get me wrong, the educated investor does not need to know as much as the adviser, in fact I find the more educated the investor the more they appreciate what it is that the adviser does for them.

The educated investor understands the risks of what they are doing verse the rewards. They understand the nature, structure, taxation position and risk of the investment they are in.

It is easy to be an educated investor, simply take the time to listen to your adviser, read all of the information provided, ask if there is some thing you do not understand and take the time to read published information about your investments. (No newspapers only published books.)

Make sure you read from a variety of perspectives on a subject and never get loyal to one persons opinion. Always understand that many people make up a market and there are many ways to do things.

The trick, is to pick the one which is best for you.

If you want to be educated, pick up the phone and give us a call and we will arrange to send you a copy of our book. Hopefully the first of many you read.  

Call (07) 4771 4577.