An investor is someone who has access to extra resources that can be put into a venture with the hope of making extra returns. Notice that he or she must not necessarily own the money that will be used for the investment. An investor understands the importance of investing in the development of an economy.
A good investor explores the environment for any investment opportunity that comes up. An investor can make good investments in the form of bonds, shares, real-estate, derivatives, currencies, commodities, gold, livestock, online investment, etc. This individual called an investor or sometimes referred to as an investment manager.
There is a slight difference between an investor and a business owner. An investor puts in his or her money into an economic activity without necessarily playing any part in the management of the resource. A business owner on the other hand puts in both his money and time. The degree of involvement that is required from a business owner depends on the type of business that the entrepreneur sets up.
CHARACTERISTICS, TRAITS, AND SKILLSETS OF SUCCESSFUL INVESTORS
Passion of lion heart: investing is an art that is reserved for the brave. It sometimes involves withstanding momentary shock that is usually followed by windfall gain. This lesson has long been learnt by chartists. To be successful as a big time investor, you have to learn how to be patient like a lion waiting for the prey to become vulnerable.
Ability to make sense from numbers: every investor will almost certainly tell you that numbers are your friend. Goldmines are always hidden numbers. In as much as non-financial factors still play significant role in investment analysis, financial analysis remains the foundation of every worthwhile investment strategy. If you looking to become an investor, one sure thing to do is to make numbers your friend.
Understanding of risk management: risk management strategy is an integral part investing. There is no point investing in an unsafe way that would endanger the initial capital invested. I will forever remember my first bitter experience with FOREX trading when I failed to follow well documented risk management strategy.
Ability to identify trends: big time investors already know that the trend is your friend. Although some will argue that following the herd in investment banking sector is one of the primary causes of the recurring global and regional financial crisis. Well, what you have to always bear in mind is that it would have been worst if trends are not followed. Follow the trend but know when to see caution and apply break.
TYPES OF INVESTORS
Active investors: an active investor is someone who makes investment and monitors it on a regular basis. These are sometimes referred to as traders. In fact, many active investors are employed on a fulltime basis.
Passive investors: these are the class of people who invest on an irregular basis. They are those that put money aside for the long term purposes.
I hope this article has provided an answer to the question “who is an investor”? If you have any question that not answered by this article, feel free to send me an email through the profile page.