There are nearly as many different investment styles as there are investors. No one approach is better than the other. Different approaches work for different investors for different reasons at different times in different ways. The trick is to learn as much as possible about as many approaches as possible and to use them as intelligently as possible. This article explores this concept in helping the stock market investor consider their approach.

1.     The Bull

Confident, aggressive, expects things to get better and better. Happy to invest even as prices are rising as the bull thinks that prices will continue to rise through a general optimism towards the future.

2.     The Bear

Negative, pessimistic and generally gloomy about the future. Expects the stock market to follow a period of sustained decline hence is more likely to sell than buy through being prone to fear and panic. Quite the opposite to the bull.

3.     The Tortoise

Takes the long term view, very long. Invests in great companies for good prices and is happy to wait, and wait, and wait for wealth to accrue and to see his assets increase. Not prone to following market trends or speculation and pays little attention to fashion, fads and trends. Neither optimistic or pessimistic, governed by reason and logic with a low tolerance for risk, and rarely intends to buy and sell shares.

4.     The Hare

Takes a shorter term view and seeks a higher return on his investments as quickly as possible, with a higher tolerance for risk than the tortoise. Keen observer of market trends and fluctuations, and can’t really leave it alone trading frequently. A believer that the trend is your friend, the hare tries to use the volatility of the stock market to make frequent trades for a profit as soon as possible.

In reality of course investors do not neatly follow the pattern of any of these types, but rather, tend to follow all of them to different extents for different reasons at different times, whether we are comfortable with that fact or not.

I consider myself to be a value investor with most in common with the tortoise, yet at times I have invested like the hare and have often demonstrated behaviours of both the bull and the bear. There is nothing wrong with that. To follow only one path is the road to folly in investing. The most successful investors, like Warren Buffet, have demonstrated a capacity to adapt their investing approach taking on different styles at different times.

Don’t fall into the trap of labelling yourself as a particular style of investor and taking a rigid approach to your investing. Afford yourself flexibility to adapt, and you build yourself a margin of safety in your investing through capacity to change.

 Jamie E Smith is the author of Making Money From Stocks And Shares

This content was provided by one of our users, Jamie