Why and how do you invest?
Some motivations for making investment decisions are clear, while others may be more complex. Decisions do vary between investments by the same person or family office, however, they vary even more between investors with different financial personalities.
A new research study from Positivly reveals some clear trends pointing to four dominating investor profiles and how investment professionals can assist them so they get both the financial results and personal satisfaction they look for from investing.
The PSTV Framework of Investor Profiles
Positivly has modified the SPIRE framework to develop investor profiles based on positive psychology geared specifically toward investment styles.
Individuals score points in four categories – Purpose, Security, Touch and Viewpoints (PSTV) – to discover their financial personalities.
1. Purpose: People who invest with purpose look for profound meaning and purpose-driven elements to investing. Impact investing and Environmental, Social and Governance (ESG) are ways to incorporate this into their financial portfolios.
2. Security: Quality investments can feel like a safety net, particularly for those with a security personality headed into more expensive stages of life, such as retirement.
3. Touch: For those who like to question their investments, their financial personality will fall under touch. They look for a logically driven relationship with their investments and portfolio as a whole.
4. Viewpoints: It’s no surprise that for some, investing can feel like a high staked strategy game. Those who invest with a viewpoints personality like to be rewarded for good instincts. They may find Sector, Geographic and Thematic portfolios the most engaging.
These investor profiles can also be used to track trends across demographic groups.
For instance, Americans on the verge of retirement fall under the security personality more than anything else. However, as soon as they reach retirement age, they may return to a purpose personality.
Americans most often invest with purpose, although varying demographics interpret purpose differently. For example, older Americans more often consider the climate in their investing, while younger people are more concerned about poverty.
Are you curious about which of the financial personalities you are? You can take Positivly’s quiz.
Expert Assistance for Your Financial Goals
Another surprising discovery from the study: across the board, American investors do not feel confident in understanding their own investments. While they have clear cut reasons for investing that are illustrated in their financial personality and thus their investor profile, they remain unclear about their results or how to refine them.
“Out of those polled, 23% were confident about their investing.”
Working with financial experts who offer knowledgeable investment advice, and who take the time to explain the reasoning, can help build investors’ confidence. With the information gleaned from the investor profiles quiz, these financial experts can then help construct a portfolio to meet the investors’ unique needs.
Communication is key. When investors feel more involved and certain about their financial decisions, they can feel more confident that they will meet their targeted investment goals.
As our world becomes more and more data-driven, companies on the cutting edge are able to offer their clientele customizable products, including investing strategies.
Stableford Capital can help customize your investment portfolio to be successful as well as intellectually and emotionally satisfying for your financial personality. To learn more about strategies for investor profiles, contact us, or call 480.493.2300.