What investor are you?

It is difficult to categorise investors. Just like the millions of Gods, there can be millions of investor types as well. Monika Halan of Livemint, made an attempt to do so in her recent column defining 8 such investor types. I have my views. Let’s see which investor type are you.

First, check out her list:

1. The Ostrich
2. The FD Hugger
3. The Policy Wonk
4. The Unluckiest Investor
5. The Land Shark
6. The Feeding Frenzy Funder
7. The Monthly Sipper
8. The Money Yogi

The first and the last caught my eye. The first one is the most commonly found (yeah!) and the last one the least, much like a diamond. Probably, that’s the reason I am running my practice 😉

Now, while the names suggest quite a bit you must read the full article here to understand which one are you likely?

Ms Halan has been a little kind with the words. While I agree with the nomenclature, I want to give a little twist of my own. Forgive me if this sounds harsh to you.

The Zamindar

I was talking almost a decade ago to this HNI investor. He had many properties to his name (on loans, of course). He mentioned to me about his interest in another under development property.

I told him, “What? Are you trying to be a Zamindar?”

Zamindar was the person who used to own huge tracts of lands and offered money for work to the locals.

The attraction of land and real estate has been older than all new financial instruments. So much so, that it has become a part of the genes. Worse, one is willing to run multiple loans to add property. At its core is the thing of being a ‘zamindar’ and commanding that same status (good or bad).

It is not easy to let it go. The investor persisted, “It has a golf course attached to it.” I saw the real reason. My suggestion to him, “Take a golf course membership, please. We don’t need one more Zamindar.”

The ‘Interest’ed 

This is the equivalent of the FD Hugger. Interest, ‘sood’, ‘vyaaj’, still has a certain pull for most investors who still in the fixed income dream created decades ago.

Of course, the banks, specially the PSUs, continue to be the ’safe place’ to park your money. Undoubtedly! But they are not a safe place to grow your money.

These ‘Interest’ed investors are yet to wake up from the sleep.

The LICker

L.I.C.k.e.r. Need I say more! The uncle, in law, cousin, friend, colleague came to know about you and licked up to you with an ‘investment cum insurance’ policy. You obliged. Unfortunately, your portfolio didn’t. You become a ‘policy wonk’.

On top of that, when investors realise the sham, they surrender these policies at huge costs and taxes. Yes, your uncle has a neat commission in his pocket.

The Starry eyed

Well, I refer to the star ratings of mutual funds and their fund managers. Every time I recommend funds, the investor is quick to check the star ratings. “Why is this not the top rated fund?”

It is difficult initially. The pull of the ‘stars’ is so huge.

Well, over time, one sees the point and realises the difference between a fake star and a real star.

Yet others never get it. They keep jumping from one star to another with no place to call home.

This is how I see it. As an investor, you will go from one type to the other or may just be a mix of them. However, I am sure with the right discipline and structure, several of you will go on to become a Money Yogi.

A simple trick is to get the right advice and ‘learn to breathe’. All the best!

So, how far are you from being a Money Yogi? Do share your thoughts.