Investing in stocks can be tricky manner. Thus, Benjamin Graham (Warren Buffett’s stock market mentor) recommend that it is best to treat all of your investment pursuits as a business. Before you decide to buy your first stock, you should understand the basics of stock investing and learn how to invest in stock with confidence. There are some distinct types of investors:
1) Pre investor, the pre-investor’s financial world is primarily about consumption, they prioritize consumption rather than investment and saving. They are not yet aware of the need to have financial responsibility to live in the future. they should start investing passively so that they can move beyond financial dependence and towards financial independence
2) Passive investor, this is the most common starting point for financial security.Passive investment is a place where the retail world invests. Passive investor types usually use all the basics of healthy personal financial planning: own their own home, pension funds, pension plans, asset allocation, and save at least 10% of income.Passive investors typically rely on other people’s expertise for their investment strategy.he type of passive investor experiences higher volatility and a lower probability of return when compared to the successful implementation of an active investment strategy.Passive investors tend to eliminate pressure from investment decisions by setting parameters to add more stock to their portfolios.
3) Active investors are very careful of their stock performance, conduct a lot research and keep up with the daily financial news. And then active investors are willing to spend that extra effort because they understand the weath building game is about return on capital. Active investor have embraced full responsibility for their financial future and taking responsibility for the return on their invested capital through active strategies that add value.
4) Speculator, looking for a chance to make money fast, They tend to sell after the stock has made a little money, arguing that they can repeat the buying and selling process often and therefore outperform the market. They explore the news for announcements about mergers that can positively affect the company.
5) Retirement Investor, People who invest in retirement tend to change their tactics as they approach retirement age. They may choose an aggressive approach when they are young. This involves buying risky stocks that have growth potential. This type of investor switches to dividend stocks that generate income during retirement.