Discover your investment personality

In South Africa, the need for saving and investing has never been greater.

With one of the lowest savings rates globally, many individuals lack a financial buffer during challenging economic times like recessions, high inflation, or interest rate hikes. Investing offers a powerful solution to make your money work harder for you. Discovering your unique investment personality is a vital step towards maximising returns and achieving financial success.

Duma Mxenge, Business Development Manager at Satrix, emphasises Satrix’s commitment to assisting South Africans in enhancing their investment knowledge and promoting awareness around saving and investing.

Mxenge explains, “Several factors influence our investment personality. Upbringing plays a significant role. In my case, growing up in a restrictive environment due to the government at the time shaped my parents’ cautious financial mindset. Children exposed to these money values tend to either adopt similar conservatism or embrace a more maverick mindset.”

It’s important to note that there is no right or wrong investment personality. The key is to work with your natural traits and develop a strategy that aligns with who you are. Now, let’s dive into the practical steps.

Uncover your investment personality and optimise your strategy

Take our insightful quiz to uncover your investment personality and gain valuable insights into optimising your investment strategy:

Decision-making approach:

a) Rely on emotions and gut instincts.

b) Prefer analysing facts and data before making a decision.

c) Tend to follow trends and go with feelings in the moment.

d) Trust own research and judgment to guide choices.

Attitude towards risk:

a) Extremely risk-averse, prioritising capital preservation.

b) Prefer lower-risk investments with some tolerance for volatility.

c) Willing to take on moderate risks for potential higher returns.

d) Comfortable with higher risks for significant gains.

Reaction to market fluctuations or unexpected events:

a) Get anxious, prone to impulsive decisions.

b) Remain calm and focused, relying on research and long-term strategy.

c) Inclined to react quickly, often following the herd mentality.

d) Assess the situation and make informed adjustments as needed.

Investment timeframe:

a) Prefer short-term investments with quick returns.

b) Have a medium-term outlook, focusing on steady growth.

c) Enjoy exploring various investment opportunities, even if short-lived.

d) Have a long-term perspective and patient waiting for returns.

Preferred level of control over investments:

a) Prefer minimal involvement, relying on experts.

b) Like to be involved but also seek professional advice.

c) Enjoy actively managing investments and making frequent adjustments.

d) Have complete confidence in own abilities and prefer independent management

Evaluate your answers and discover your investment personality:

Mostly As: Cautious Investor

Your priority is capital preservation, favouring safer investment options. Low-risk opportunities and long-term stability align with your goals. Consult with a financial adviser to build a diversified portfolio that matches your risk aversion.

Mostly Bs: Methodical Investor

Your approach to investing is analytical and meticulous. You rely on thorough research, facts, and data to make well-informed decisions. A balanced portfolio with a mix of low to moderate risk investments suits your style. Regularly review your strategy to stay aligned with long-term goals.

Mostly Cs: Spontaneous Investor

You enjoy taking risks and following trends. Beware of impulsive decisions and focus on maintaining a diversified portfolio. Seeking guidance from a financial adviser can help you navigate the market and manage risk effectively.

Mostly Ds: Individualist Investor

Confident in your own research and judgment, you leverage independence and research skills to build an investment portfolio aligned with your goals. Stay well-informed about market trends and be open to adjusting your strategy based on changing circumstances.

By understanding your investment personality and tailoring your strategy accordingly, you can contribute to a stronger savings culture and secure your financial future.

Regardless of your investment personality type, diversification is key. According to Mxenge, “Exchange-traded funds are investment vehicles which offer affordability, simplicity, flexibility, and the ability to diversify across various asset classes, ensuring your portfolio is well-rounded.”

He adds that investing is a lifelong process, suggesting that investors should stay informed, continue learning and adapting strategies as market conditions evolve. With the right knowledge and self-awareness, significant strides can be made towards achieving financial goals.

For more from Duma Mxenge, listen to his recent appearance on the Ghost Stories podcast:

Satrix Investments (Pty) Ltd is an approved FSP in terms of the Financial Advisory and Intermediary Services Act (FAIS). The information does not constitute advice as contemplated in FAIS. Use or rely on this information at your own risk. Consult your Financial Adviser before making an investment decision.

Satrix Managers (RF) (Pty) Ltd (Satrix) is a registered and approved Manager in Collective Investment Schemes in Securities. While every effort has been made to ensure the reasonableness and accuracy of the information contained in this document (“the information”), the FSPs, their shareholders, subsidiaries, clients, agents, officers and employees do not make any representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaim all liability for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance upon the information.