• Revenue Cycle Management
  • COVID-19
  • Reimbursement
  • Diabetes Awareness Month
  • Risk Management
  • Patient Retention
  • Staffing
  • Medical Economics® 100th Anniversary
  • Coding and documentation
  • Business of Endocrinology
  • Telehealth
  • Physicians Financial News
  • Cybersecurity
  • Cardiovascular Clinical Consult
  • Locum Tenens, brought to you by LocumLife®
  • Weight Management
  • Business of Women's Health
  • Practice Efficiency
  • Finance and Wealth
  • EHRs
  • Remote Patient Monitoring
  • Sponsored Webinars
  • Medical Technology
  • Billing and collections
  • Acute Pain Management
  • Exclusive Content
  • Value-based Care
  • Business of Pediatrics
  • Concierge Medicine 2.0 by Castle Connolly Private Health Partners
  • Practice Growth
  • Concierge Medicine
  • Business of Cardiology
  • Implementing the Topcon Ocular Telehealth Platform
  • Malpractice
  • Influenza
  • Sexual Health
  • Chronic Conditions
  • Technology
  • Legal and Policy
  • Money
  • Opinion
  • Vaccines
  • Practice Management
  • Patient Relations
  • Careers

Personal Investing and Being Aware of Your Personality Traits


Knowing what financial personality trait you have can help you minimize your self-talk and propel you into understanding and maximizing your investing strengths.

You may have been on the sidelines for some time—following the market and watching it go up, down and sideways. Pundits tell you now may be the best time to get into the market, while others tell you to get out.

Dilettante investors may jump in with both feet first, not caring or knowing what the investing temperature is, while pedantic investors decide to put in one toe at a time. Additionally, some investors exhibit alacrity with their investing decisions—usually after getting a "hot tip" without any knowledge of what they are doing or why. Conversely, some decide to weather the storm of uncertainty and stay the course, while others bail on the market and mumble to themselves never to return.

Unfortunately, scenarios such as these—although appearing extreme to some—play out on a daily basis. After the financial wounds are licked or financial gains are exuberantly exclaimed, perhaps it is the investor's psyche of self-talking that is explaining his or her decision.

In Psychology of Investing (4th Edition), John R. Nofsinger, a finance professor at Washington State University, wrote:

"An old Wall Street adage states that two factors move the market: fear and greed. Although true, this characterization is far too simplistic. The human mind is very sophisticated, and human emotions are very complex. The emotions of fear and greed just don't adequately describe the psychology that affects people."

Investor type and you

The psychology of investing, or behavioral finance, is a topic researchers are delving into, with investors and financial professionals paying attention to the findings and results.

In essence, why do investors do what they do and then react to what they experienced in so many different ways? According to Morningstar’s Stocks 400 investing classroom (Course 407):

"As much as anything else, successful investing requires something perhaps even more rare: the ability to identify and overcome one's own psychological weaknesses."

What terms are used to help describe an investor's mental preponderance to investing? These include: overconfidence, selective memory, self-handicapping, loss aversion, sunk costs, anchoring, confirmation bias, mental accounting, framing effect, and herding.

Amazingly, investors, if successful even one time, think doing the same thing may yield the same results. This mantra does not seem to be realistic given that markets are prone to financial shifts for a multitude of reasons and, at times, for no obvious reason at all. Even the most conservative investor who keeps cash in a CD to minimize market risk, is still exposed to risk, albeit a different type—inflation.

Any investment whether conservative to aggressive has risk and every investor is exposed to some form of it. The key is to mitigate the risk and attempt to maximize the return and do this within an agreed to investing tolerance.

You think you know

Investors have their own thoughts of what investing means and how to do it. In reality, investors may not have a clue of what an asset class is or how one class relates or interacts with another type of class.

For example, how does a gold stock fair when placed in a portfolio with large-cap stocks and bonds? What effect does inflation, changing interest rates, or political unrest overseas have on portfolio asset class holdings? What strategy does an investor have in place to help decide to hold, sell or buy additional assets-the same or different-for their portfolio?

Knowing what financial personality trait you have can help you minimize your self-talk and propel you into understanding and maximizing your investing strengths. There are those self-motivated investors who, once understanding their own psyche, can move in a positive direction and be content with their decisions—good or bad. Others, even after realizing their investing preponderance and limitations, may decide to consult and work in conjunction with a financial fiduciary (i.e. a certified financial professional), whose primary responsibility is always doing what is in the best interest of the client.

Being honest with one's self and taking a life inventory of current situations and anticipated changes allows for a realistic approach to investing and establishing goals across the board and in all facets of one’s life. Whether financially self-directed or working with an adviser, transparency, full-cost disclosure, knowing your goals and expectations, being realistic with results, and understanding your financial personality traits make for a good combination in achieving your bottom line results without second guessing yourself.

Investing style

Andrew Carnegie said, "Anything in life worth having is worth working for."

Proper financial planning allows your investments to work for you, and you reap the reward of prudent investing. Slow and steady may be boring for some and welcoming by others. It is your money and you have the right to invest it anyway you chose or not.

Realizing the inherent risks of any investment, no matter how benign in appearance or outlandish in its claims of success, the choice is yours. Choose wisely, know your personality trait and ask for help if you think prudent.

H. William Wolfson, DC, FICC, MS, MPAS is a financial consultant and advisor. After passing the rigorous Certified Financial Planner examination, Dr. Wolfson obtained a Master of Science in Personal Financial Planning from the College for Financial Planning. He was subsequently awarded by the College a Master Planner Advanced Studies. Dr. Wolfson is a member of the Financial Planning Association (FPA). Dr. Wolfson retired after 27 years of active practice and remains active volunteering his expertise to the continued education and success of professional colleagues and investors. Dr. Wolfson may be contacted at

Related Videos
Victor J. Dzau, MD, gives expert advice
Victor J. Dzau, MD, gives expert advice