What is the investor's profile?
Investors' profile reflects the objectives and objectives of investors. It defines how much risk someone is willing to accept, as well as the types of rewards or revenues they expect. On the basis of this profile, the investor and financial advisor can jointly determine where to allocate funds, because each class of assets bears a different level of risk. The investor's profile determines how much capital goes to stocks, bonds and other assets and how much it should remain in cash.
Some criteria determine the investor's profile. The financial advisor often asks the client to fill in the investor's profile questionnaire. The purpose is to find out basic information, such as the amount of money available for investing, when the funds will be needed for what the funds will be used and the age of the investor. For example, an investor who is close to retirement also plays a loss in his investor's profile. If the portfolio drops by 20% in one year and the investor uses this as an opportunity to buy additional securities, its risk tolerance is high. If, howeverThe portfolio disposes of and sells everything, there is low risk tolerance.
Investor with a conservative investor profile takes the least risk. Returns in a conservative portfolio can be modest, but also a chance of losing money. Someone with a slight profile of investors has adequate understanding of the stock market and is willing to take risks. The aggressive investor has advanced knowledge of financial markets and is not afraid to make risky investments. He should expect the highest return rate.
portfolio will be divided on the basis of investment goals. Government bonds are the safest investments if the basic government does not tend to fail on its debt. Company bonds can be risky because if a company fails on a loan, some investors may not be paid. Bellwether shares are leading in the field and investors may feel safer with a company with proven historical revenues. RisksThe shares are shares without proven results or have shown signs of continuing weakness in its price.