Thursday, June 26, 2008

Which type of investor characters are you? Are you a bull or bear on current market?

The Bull
They are the buyers who always buy at low price and sell at higher price in an up-trending trade. They believe that the market will rise. They profit on upward movements and are often optimistic. Their risk is limited to the total amount of their investment and their profit is unlimited. They are the exact opposite of the bears who are pessimistic and believe the price will decline.

The Bear
They are the sellers always sell at high price and buy back at a lower price in a down trending trade. They believe that the market will fall. They profit on downward movement and are often pessimistic. Their risk is unlimited and their profit is limited to the total amount of their investment.

The Turtle
This is nickname given to those who are unskilled or ungifted investors that learn and grow in the market to become great investors. This started from experiment done by Richard Dennis and Bill Eckhardt. Dennis believed that a person could be trained while Eckhardt thought it was an innate skill.

The Pig
These are the investors who have high expectations that forget their investment plan and go for unrealistic future gains. Pigs tend to be greedy and often never know when to sell their position to realize the gain.

The Ostrich
These are the investors who are ignorant of market factors and news. The reason behind type of action could be attributed to risk aversion and bias. Ostriches will ignore the market even when it is not advantageous to them, like the actual bird that sticks its head in the ground in response to stress and danger.

The Lemming
These are the investors that follow the crowd and often end up in disaster. This is in reference to the rodent with a habit of mass migrations that end up in drowning.

The Sheep
This refers to those investors that lacks a focused trading plan and invests on the suggestions of others, including friends and financial gurus. Their behavior is like the animal that relies on its shepherd for guidance. They are famous for investing on emotion without consideration to their financial viability. They are often the last to get in on a major market move and are most likely to suffer investment losses because they have no clear investment strategy.

The Barefoot Pilgrim
This is the slang given to investor who has lost everything in the stock market. They are often the result of taking on more risk than necessary or affordable, or taking on investments carelessly without proper research and planning.

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