Stock market is exciting, people make money loss money. Its the game of up and down. Its a place where rags to riches and riches to rag are everyday story. This market is a perfect epitome of life. You are not always winning neither always loosing, You will win and loose as well, then only you value your wins. In this market, its not the money you lost, its the fees you paid to learn a new lesson to trade in the market, which will be with you for the entire life.
In this market, there are different types of individual with different trading styles. Each trader has its own style to invest in market. Our nature and character reflects in our trading style. Our trading style also depends on your risk tolerance, your time horizon. After considering all these factors we boil down to some specific characteristics of some particular investors type, which are as follows:
First on the list is ACTIVE INVESTOR
As the name suggests, these type of investors are active and up breast with the stock market performance. They are not waiting , they are updated with all the financial and triggers of the market and thus their decisions about their investments are well informed. These type of investor doesn’t necessarily holds scrips for long. They love the market, but not the stock.
Then comes the entirely opposite ones called PASSIVE INVESTORS, they are not typically in for long term risky investments. They are happy gaining less, but doesn’t want to raise their blood Pressure. Passive investors are trying to reduce the stress, by taking small gains and adding more stocks of established companies. Lets say some stocks in their portfolio gained 20%, so the investor will sell that stock and realize some gain and add other stocks in their portfolio.
Then come the SPECULATORS, the risk takers. They are always looking for stocks and chances in the market to make fast money. They are not in for any long time investment. Speculators are mostly in for very short term trading. They are called speculator because they are mostly pro at predicting prices in a more volatile market. They try to make money in time even when the market is moving otherwise.
These are three major types of investor who invest in the stock market , in their different unique style to gain money from trading investing or speculating.