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What Type of Investor Are You?


Published December 24, 2021 • 4 Min Read

This article was originally published in RBC Direct Investing’s Inspired Investor magazine.

When it comes to keeping or growing your cash, do you like to “roll the dice” or play it safe? Do you like to keep things simple or mix them up? No two investors are exactly the same. Knowing your own approach can make setting goals and planning more rewarding.

Whether you manage your money yourself or prefer to leave the work of choosing and managing your investments to the professionals, it’s good to have an understanding of where you fit to help ensure your money is working as hard as it can for you.

In the spirit of “know thyself,” explore and compare these common investor characteristics to learn more about your own investing style.


Personal motto: A penny saved is a penny earned.

Being somewhat conservative, you may take some risks in life, but you’re not willing to risk your money. Protecting your capital is priority number one, and the prospect of even a temporary decline makes you hesitate about having investments with fluctuating values. You’re after the peace of mind that comes from focusing on capital preservation and slowly growing your savings.

Potential Benefits: Capital preservation, guaranteed investments and certainty about your returns can equal peace of mind.

Potential Risks: Low returns may mean you’re not keeping up with inflation. Stronger investment growth may be needed, depending on your long-term goals.

How to Thrive:

  • Set financial goals to work towards. Check your progress regularly to see if you’re on the right track.

  • Take the time to learn about different investment choices and services.

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Personal motto: Everything in moderation.

As a balanced investor, you have found a healthy medium on the risk-reward spectrum that works for you. You understand that taking some risk is necessary to achieve your long-term financial goals and are comfortable with having a mix of assets in your portfolio to help you reach your goals.

Potential Benefits: The upfront work of assessing your goals, understanding your risk tolerance and having a diversified portfolio to match should serve you well in your bid for investment success.

Potential Risks: You’ve done well to minimize risk, but life situations and goals can change. Consider checking in on both your goals and your progress towards achieving them every few years.

How to Thrive:

  • Setting goals is important in your investing journey. They can help you better evaluate your situation.

  • Keep an eye on your investments, or choose a service that lets you sit back and relax knowing that someone is keeping an eye on them for you. Regular portfolio monitoring helps ensure it continues to reflect your investing strategy.


Personal motto: Now, not later.

You’re inspired by overnight success stories and love hearing about small businesses that turn into multi-million-dollar enterprises, or penny stock investments that skyrocket. You’re willing to step out of your comfort zone and take risks with the goal of achieving strong returns over a short period of time.

Potential Benefits: Your go-big-or-go-home mantra can mean potentially large swings in your portfolio’s value – nice when it’s up, and not so great when it’s down.

Potential Risks: With a sizeable chunk of your portfolio invested aggressively, there’s a risk of making emotional decisions you may regret.

How to Thrive:

  • Depending on how you invest, touch base with your advisor or someone in your trusted network to help you keep things in perspective.


Personal motto: Want to race?

You’ve got a competitive spirit fueling your fire and you do your homework. You’re willing to take the time to research and evaluate new opportunities and take advantage of market changes. You want your portfolio to beat equity-market performance, not just match it. Let your long-term financial goals guide your investment choices. Keep in mind that setting goals can be key to keeping your investments on track.

Potential Benefits: Strong research and a desire for information mean your investment choices are carefully thought out.

Potential Risks: A short-term view could lead to taking aggressive risks when your portfolio underperforms in any given year, even though your investment choices could do well over the long haul.

How to Thrive:

  • Brush up on different investing strategies to ensure you’re doing what’s right for you.

  • Ensure your investment service is a good fit for you and your money.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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