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Article  •  20 September 2022

 

QUIZ: What type of investor are you?

Find out what type of investor you are, thanks to this helpful quiz from Investing with She's on the Money.

Before you start investing, it’s important to understand what your personal risk tolerance is.

By figuring out what type of investor you are before diving in, you can figure out which classes will work for your personal situation. Not every person has the same approach to investing, so by taking a minute to figure out your approach to risk you’ll be helping your future self as the market hits peaks and troughs. While some people are okay riding the fluctuations, it might not make sense for others who are investing short-term or might only be seeking low levels of returns.

But how do you find out what type of investor you are? Never fear, Victoria Devine has your back.  

Her new book, Investing with She’s on the Money, offers plenty of investing advice for newcomers, including – you guessed it – an easy quiz to help you figure out your investing style.

Answer the questions below to see what kind of investor you are. 


How long would you expect to invest before you would need access to funds?

A – Very short term (the next six months)

B – Short term (the next 12–18 months)

C – Short to medium term (the next 18 months to three years)

D – Medium term (the next three to five years)

E – Medium to long term (the next five to ten years)

F – Long term (more than ten years)

 

What type of investments have your previous (or current) investments been?

A – I only have investment experience in basic banking products and term deposits (i.e. never invested in bonds, shares or property).

B – I have had minimal exposure to basic banking products, as well as bonds and property.

C – I have had some investment experience and some exposure to property and equities in the past.

D – I have had some experience in all major asset classes, including Australian shares as well as some minimal experience with international shares.

E – I have had a lot of experience in all asset classes, with particular focus on Australian and international shares.

F – I have had a great deal of experience in all asset classes, including the overseas share markets and ‘exotic’ investment products, such as artwork or luxury cars.

 

Which of the following best describes your investment objectives?

A – To generate an income without reinvesting dividends.

B – To generate an income and a small amount of growth.

C – To generate an equal amount of income and growth.

D – To generate a small amount of income and to have substantial growth.

E – To generate growth with little to no income.

F – To generate growth with no income. (This means you’re constantly reinvesting your dividends to take full advantage of compound interest so you’re left with the biggest possible income at retirement.)

 

If your investment strategy was for the long term (minimum seven to ten years), how would you react if in six months’ time, your portfolio decreased in value by 20 per cent?

A – I would not accept any declines in the value of my investment

portfolio.

B – I would transfer my investments to more stable investment markets.

C – I would be somewhat concerned, but can accept very short-term volatility in the markets.

D – I would adopt a ‘wait and see’ approach to see if the investments improve before making a decision.

E – I know the risks and volatility levels are higher, so I would leave the original long-term strategy in place to let it run its course.

F – As I expect long-term growth, I would intend on investing more money to take advantage of the lower average investment prices.

 

In consideration of your investment objectives and the level of volatility you could tolerate, hypothetically which of the below annual return scenarios (with a ten-year compound return) would you feel most comfortable with over the long-term?

 

 

A

Year 1
2.4% pa

Year 2
4.1% pa

Year 3
3.5% pa

Year 5
3.0% pa

Year 7
2.5% pa

Year 10
2.9% pa

B

Year 1
4.0% pa

Year 2
4.5% pa

Year 3
3.8% pa

Year 5
4.0% pa

Year 7
5.0% pa

Year 10
4.1% pa

C

Year 1
5.0% pa

Year 2
4.8% pa

Year 3
5.2% pa

Year 5
5.9% pa

Year 7
6.1% pa

Year 10
5.4% pa

D

Year 1
6.9% pa

Year 2
2.0% pa

Year 3
9.9% pa

Year 5
5.2% pa

Year 7
-2.9% pa

Year 10
6.8% pa

E

Year 1
-2.8% pa

Year 2
4.5% pa

Year 3
11.5% pa

Year 5
8.2% pa

Year 7
-5.5% pa

Year 10
7.9% pa

F

Year 1
9.4% pa

Year 2
-3.7% pa

Year 3
14.8% pa

Year 5
-13.0% pa

Year 7
10.5% pa

Year 10
9.1% pa

 

Results: add up your score by writing the number of times you ticked each letter.
A. _____

B. _____

C. _____

D. _____

E. _____

F. _____

 

If you mostly selected . . .

A – You’re defensive

B – You’re a conservative

C – You’re a moderate conservative

D – You’re a moderate grower

E – You’re a growth investor

F – You’re a high-growth investor  

 

Learn what your investing style says about you, and see Victoria’s advice for splitting your assets on pages 249 – 251 of the book.

Feature Title

Investing with She’s on the Money
The ultimate millennial investment guide from the award-winning, number one bestselling author of She’s on the Money Finalist: Best Personal Finance & Investment Book of the Year at the 2023 Business Book Awards
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