What’s Your Investing Style?

What’s the secret to successful investing? No really, what is it? We’d love to know!

While there isn’t just one big secret, many would consider the core of all investing success to be based on one main investing principle: know yourself. That means figuring out things like just what you’re saving for, how much risk you’re comfortable with and how long you’ve got to invest. With that in mind, what type of investor are you?

Nervous, Low-Risk Investors

Motto: A penny saved is a penny earned

Portfolio Style: Keep it Safe

You may take some risks in life, but you're not willing to risk your money. Protecting your capital is priority number one, so the prospect of a decline — even a temporary one — makes you hesitate about buying an investment whose value can fluctuate.

For you, it's about safety and comfort. Your thinking is simple: life has enough ups and downs I can't control, so why put my money on the line? You take great comfort knowing that even if your returns are modest, your investment value won't surprise you.

Potential Benefits: Capital preservation, guaranteed investments and certainty on 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 long-term goals.

How to Thrive:

• Our Goal Setting tool and our Six Steps to Investing articles can help ensure you're on the right track
• Learn more about different investment choices available such as stocks, bonds, mutual funds and ETFs

Innovators

Motto: Time is money

Portfolio Style: Cutting-edge and always changing

Innovators are often known for their top-notch understanding of the intricacies of trading. Technical and fundamental analysis, options trading, stop loss and stop buy orders are second nature to you. You dedicate considerable time to research, investment monitoring and moving in and out of positions — and you're quick to make use of new resources. You've got a high risk tolerance level, and your confidence can make you an aggressive investor.

Potential Benefits: Innovators are generally highly educated and quick to adapt to new technologies, meaning investment picks are carefully researched.

Potential Risks: With all the tools and technology at your fingertips, there's potential to "over transact," which may not equal greater investment success. Changing circumstances can also mean finding yourself with fewer hours to focus on your portfolio than you thought.

How to Thrive:

• A practice account can allow investors to try out different strategies

Family Stewards

Motto: For love and money

Portfolio Style: Slow and steady

Like Nervous, Low-Risk Investors, conservative investing works for you and — even more importantly — for your family. Family Stewards feel a keen responsibility to hold down the fort financially, whether it be for a spouse, parents, children or siblings. That means you tend to think long-term, low-risk and always with the family unit in mind. Your goals might include post-secondary education, retirement savings and/or family travel. Your investment approach is safety first, and your portfolio might lean toward guaranteed and fixed-income investments.

Potential Benefits: You've got a solid strategy of short-term goals, greater certainty on what your returns should look like and peace of mind knowing you're looking out for loved ones.

Potential Risks: Low, secure returns can work for short-term goals. To reach those long-term goals, you'll have to maximize your investment return. Hitting long-term goals, though, may require higher growth. You also want to ensure you've chosen the right account (s), such as RRSPs, TFSAs or RESPs for your savings.

How to Thrive:

• Understand different account types
• Create measurable goals with the help of our goal setting tool

Financial Freedom Seekers

Motto: Now, not later

Portfolio Style: Revved up and ready to go

Financial Freedom Seekers are inspired by overnight success stories. You love the small-business-turned-multi-million-dollar enterprise story lines, or penny stock investments that skyrocket. You want financial freedom — but you're not interested in waiting to get there.

With investing, your overriding trait is impatience. You're willing to take big risks with part of your portfolio, but you can be impatient when it comes to research. Investment ideas might be based on what you read, with little other analysis.

Potential Benefits: Your go-big-or-go-home mantra can mean potential 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 some emotional decisions you may regret.

How to Thrive:

• Channel some energy into resarch to help choose investments
• Read about different investing strategies, such as the benefits of diversification

Balanced Investors

Motto: Everything in moderation

Portfolio Style: Steady she goes

Balanced Investors have found a healthy medium that works for them on the investor-risk spectrum. You've set goals, understand both your comfort level and risk tolerance, and have built a diversified portfolio that you revisit regularly to ensure you've got the right mix. You largely focus on long-term goals, and you're prepared to ride out short-term volatility.

Potential Benefits: Doing the upfront work of assessing goals, understanding your risk-comfort level and building 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 reassessing both your goals and your progress towards achieving them every few years.

How to Thrive:

• Our goal setting tool and research tools can help you evaluate your situation.
• Use the Analyze & Rebalance tool to review your portfolio

Scorekeepers

Motto: Want to race?

Portfolio Style: Competitive spirit

Scorekeepers have a competitive spirit fuelling their fire — only they've done their homework. You're an active investor who wants to beat equity-market performance, not just match it.

You're a keen researcher who looks for any new information to give you an edge. Your competitive spirit can sometimes override sound decision-making, and you may be tempted to increase risk in your portfolio to make up for any recent underperformance.

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 some aggressive risks when your portfolio underperforms in any given year, even though your investment choices could do well over the long-haul. Chasing short-term returns can run the risk of losses if higher-risk investments don't perform well.

How to Thrive:

• Brush up on some of the most effective investment strategies to help keep you on track
• Broaden personal investment goals with the goal setting tool

*This article was updated on September 4, 2018.