top of page
  • Writer's pictureSusan J. Brown

What's Your Investor Personality?

Biases, Beliefs and Personality Preferences

Have you ever second guessed your investment strategy? How do you know which one is best for you and your family? You have tried different approaches and you can’t seem to find something that works for you. It can be quite confusing especially when you are always hearing about different strategies and opinions.

There is not one magic strategy that works for everyone. It is rather an individual decision based on realistic expectations that sets you up for success no matter what happens in the markets. For the purpose of this article, we will define success as " holding a portfolio of investments that allow you to sleep at night while feeling confident you can meet the objectives required to meet your goals."

I believe that the first step is understanding the type of investor you are or your “investor personality”. To quote Isabel Myers Briggs, “The understanding of type can make your perceptions clearer, your judgements sounder, and your life closer to your hearts desire.” Your investor type can influence your risk level , your decisions to buy or sell and your overall level of ease with your portfolio.

After 25 years of advising clients, I developed a model which is based on three factors and two triggers that make up the investor personality.


1. Beliefs,

2. Biases and

3. Personality Preferences


  1. Emotions

  2. Research or Fact Finding

The second part of the model involves the triggers related to making the eventual decision to actually buy or sell a particular investment and even the level of risk the investor is willing to take.

Personality Preferences

Personality preferences referred to here are based on the work done by the Myers Briggs Foundation. According to the work done by the Myers Briggs Foundation, personality preferences allow us to have different interests, different ways of behaving and different ways of seeing the world. Preferences related to investing could be around risk taking, research, or the level of interest in finances or managing the portfolio.

“The understanding of type can make your perceptions clearer, your judgements sounder, and your life closer to your hearts desire”

Isabel Briggs Myers

Biases. According to researchers in psychological and brain sciences, biases are often at least partly unconscious. If you are human, you have biases but you just may not be aware of them. According to the University of Washington researcher Calvin Lai, “Bias can often lead us in directions that we don’t expect, that we don’t intend and that we might even disagree with if we knew that it was nudging us in a particular way.” You may have biases towards certain types of investments or against others such as equities over bonds. See the link below to more of this research around our biases. Are you aware of any of your biases?


According to Nils J. Nilsson, a professor in the Department of Computer Science at Stanford University, “Our beliefs constitute a large part of our knowledge of the world.” In his book titled Understanding Beliefs, he goes on to say “Many of our beliefs fall in between strong belief and disbelief. Because our beliefs influence our actions, and because some of our actions might have profound consequences, I think it is important to evaluate beliefs carefully.” Therefore we could draw the conclusion that our beliefs could shape our thoughts around investing. For example, one could believe that you can beat the stock market by doing frequent trading. Others may believe in the value of long term investing and a buy and hold approach.

“Our beliefs constitute a large part of our knowledge of the world.”

Professor Nils J. Nilsson

Emotions and Fact Finding

Emotions and fact finding impact the level of action and inaction when setting up an investment strategy and sticking to it through various market rotations. Emotions can include feelings of fear or feelings of excitement which either lead to quick action or inaction regardless of what the brain is telling us. The research component simply means the extent to which you put in time in educating yourself about the options and choices when buying or selling an investment.

Investor Personalities Model

The following model highlights the four different investor personalities based on this theory. For example, Investor A and B have higher levels of emotion at the time of starting an investment strategy. Investor B and D have higher levels of fact finding or information gathering.

Try to identify with one of the investor types and then look at some of the underlying beliefs, biases and personality traits associated. If you haven’t had success sticking to a strategy, then this may help you see what you need to be aware of and what beliefs or biases you may need to rethink.

Investor Personalities™

The following are some examples of what a typical investor may exhibit in each quadrant. These may not always hold true for everyone but I encourage you to think about what does apply to you and to work on shifting some of the those biases. You can always seek the advice of a professional who can help you sort through these.

Investor A

· Biases: Bonds are not a good investment;

· Beliefs: Stock market will continue to go up

· Personality Preferences: Prefers higher risk activities in general

Investor B

· Biases: You have an aversion to taking advice from professionals

· Beliefs: You can control your outcome

· Personality Preferences: You prefer to have controlled and planned activities

Investor C

· Biases: You lean heavily towards those who are more conservative in nature

· Beliefs: You believe you can’t predict or control the stock market

· Personality Traits: You prefer to delegate rather than control

Investor D

· Biases: You lean heavily towards proven theories and research

· Beliefs: You believe in investing for the long term

· Personality Traits: You prefer decisions based on logic rather than speculation

Talk about this with your spouse. Uncover some of your biases or beliefs you may have around money and investing. Help each other see some of the things that may be impacting investment decisions. Try to remind yourself of these things the next time we have a big market event.


Susan Brown CLU®, FEA, CFP®, RRC®, CIM®

Investment Advisor

IA Private Wealth ǀ Propel Financial Life Management

Insurance Advisor ǀ Propel Insurance and Advisory Inc.

12 views0 comments


bottom of page