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Defining Who You Are: 5 Methods of Self-Reflection

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Who are you? To invest safely and with little to no risk, you must know who you are. How do you know who you are? You are in luck, as this article teaches you all you need to know.

5 Tips to Know Who You Are As An Investor

1. Define Your Financial Goals

Start by identifying what you want to achieve with your investments. Are you investing to compound your wealth, for retirement, or to have extra income? Clear goals give you direction and help you decide on the best strategies.

2. Set Your Risk Tolerance

Risk tolerance is your ability to handle losses in your portfolio. Ask yourself how comfortable you will be when you lose a certain amount of money in your portfolio. Express this as a percentage.

How many percent of your wealth will truly make you worried when you lose it? The minimum percent is your maximum risk tolerance.

3. Recognize Your Investment Style

Your investment style reflects how actively you want to manage your portfolio. Passive investors often choose passive assets such as index funds, while active investors might trade with well-performing individual assets.

The two points discussed above will influence your investment type or style.

4. Assess Your Current Knowledge and Skills

Understand your level of financial knowledge before you start. What do you know about the stock, bond, and other asset classes’ markets?

Thankfully, it does not matter your current level of knowledge, you can get started when you use the Assessworth platform.

5. Reflect on Past Decisions and Outcomes

Look back at your financial choices. Did you save regularly, overspend, or invest impulsively? Understanding your past can reveal habits that affect your investment success.

You can also judge the outcome of your investment decisions. Did you make a series of profits or losses? This will tell you if you are on the right path or should change your strategies.

Conclusion

Awesome insights, right? After discovering who you are, head to the Assessworth platform, set your investor type and get started in your investment journey right away.

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