In the latter period, also thanks to the crypto market, everyone is wondering about the possibility or not of investing in some currency, in some company, or simply looking around to understand how to make their money "profit". It is not the purpose of this article to give advice on what to do or not to do with your own money nor to advise this or that other investment.
However, I wanted to mention some considerations on the types of approaches that can be taken when talking about investments that vary according to the most disparate reasons: risk attitude, economic situation, capital to invest, previous failures, and so on and so forth.
Types of investment
What is a bit like the mantra of all investment strategies is diversification or put it another way:
don't put all your eggs in the same basket
This thing can be declined in many ways that mainly fall into 3 categories:
- Investor who differentiates his investment portfolio to a minimum, in this case, all the capital is put into 2-3 at most 4 assets with very similar percentages. Often the person is conservative and tends to choose investments with a "low" return to be sure that what he put almost certainly will return and will have earned something;
- Investor who greatly differentiates his portfolio and who pushes the concept of "not all eggs in the same basket" to the limit, could have even 40-50 different assets with slightly different percentages. In this case, he tries to get involved in many assets in the hope that at least one of these can be the unicorn that will make him a lot of money;
- Investor who is a bit in the middle of the two previous profiles, does not have a very high number of assets in which he invests, tends to put most of his capital in "safe" assets who have rather low growth percentages, and bet a small part of his capital on assets that instead have high growth potential.
Types of investors
Let's look at the different personality types that investors can have regardless of the variety of the investment portfolio. Also in this case the declinations can be many but we can distinguish them into two main categories:
- speculative investor who does it mainly to earn so he does not care so much in what he is investing but only interested in the possible economic return, therefore he finances any type of assets in which he sees growth potential and therefore earning potential;
- passionate investor who instead puts his money in assets that interest him directly or that wants to support because he approves, the economic return often takes a back seat to the "human" one.
What category do you feel you belong to?
Often the approach to investment is a mixture of categories and it can happen to move from one strategy to another for issues of opportunity or to be passionate about some assets and speculative about others. Knowing which strategy to embrace or leave is definitely the hardest thing, you can only learn with experience and often with some loss of money, so it is always good practice to start with investing small amounts, which you may possibly lose, and then when you’re familiar with this world, move on to bigger steps.
Invest carefully, Alberto