Page 15 - DCOM507_STOCK_MARKET_OPERATIONS

Stock Market Operations

Notes  Invests regularly.
 Avoids concentration in a single investment.
 Is committed to an investing plan.

Weaknesses
 Holds losers too long.

 Does not take profits.
2. Reluctant Investor
Characteristic

 The reluctant investor does not enjoy investing and prefers to spend as little time as
possible on his or her investments. However, the reluctant investor is confident that
he or she will have a comfortable retirement.
Strengths
 Gets rid of investments that are losing.

 Avoids concentration of portfolio in a single investment.
 Does not chase ‘hot’ investments.

Weaknesses
 Invests too little and too late.
 Does not invest regularly, even if he or she has the money to do so.

 Does not regularly rebalance his or her portfolio.
3. Competitive Investor
Characteristic

 The competitive investor enjoys investing, but makes a habit of trying to beat the
market. This investor is happy with his or her current situation and is confident
about the future.
Strengths

 Invests regularly.
 Starts investing early.
 Puts as much money as possible into his or her investments.

 Regularly rebalances his or her portfolio.
Weaknesses

 Holds losers too long and does not take profits.
 Fails to adequately diversify his or her investments.
 Is over-confident and chases ‘hot’ investments.

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