We will go deeper and talk a little about what is known as the investor profile, many times it is necessary to know the risk we are willing to take before investing part of our time and money, for that it is necessary to have strategists in such markets. volatile like cryptocurrencies, let's see how it works :)
Investor profile what is it?
To be able to call ourselves as investors we must have certain characteristics that differentiate us from the rest, something we call "archetypes". An investor profile allows us to make better decisions that will be aligned according to our situation and knowledge.
How many investor profiles are there?
In general terms, the best known or that you will have heard about are: conservative, moderate and aggressive or (risky)
The aggressive profile is characterized by being impulsive in investing in markets with high risks and volatility, in these cases higher profits can be obtained and it is also willing to risk large amounts of its capital in these types of markets, such as in variable income.
The conservative profile is the complete opposite of the aggressive profile, preferring to have their investments under control at all times, they do not tolerate volatility and have greater aversion to the risk of their capital, in these cases the profits tend to be lower, generally their investments are destined to Fixed income, mutual funds or quieter investment vehicles
On the other hand, the moderate profile is a middle point between the two previous ones, this allows some volatility in your investment portfolio but take a good look at your options and will not be willing to assume greater risks for higher profits, among your most chosen investment options. are equities and fixed income
what are the criteria or characteristics that define an investor profile
The first thing is the financial situation, this would be the starting point to define your investment profile, it can be a moderate or conservative profile, but if you have a business or a fairly strong capital, it might be smart to try to invest your wealth more aggressively , taking into account that you have a certain wealth that sustains you.
You must be aware of your personal situation, if you have some money saved or a retirement fund it would not be entirely advisable to invest everything in a variable income, for example, it would be a good idea to take into account a moderate or conservative profile if necessary.
To have a rejection of risk, we will want to know very well where to put all the cards in play, although that guarantees us greater returns, in case we have low aversion to risk we will not invest conservatively, because we will not be taking all the advantage that we could from our money.
And finally, having certain financial knowledge is useful to define your investor position, as we know there are many ways to get a return on our investments. Therefore, the less financial knowledge, the more conservative our investor profile will be.
As you can see, knowing our investor profile is essential to be able to invest our money correctly. Otherwise, we will be investing inefficiently, either due to excess or lack of volatility (which is linked, as you know, to profitability).