Investing is a lot like winemaking. And investor types are a lot like the various vintages. Both require planning, patience, strategy, and deep knowledge based on experience.
In both processes, the desired outcome isn't always guaranteed. Instead, a winemaker strives for consistency and gains from year to year, understanding that every vintage will be uniquely nuanced, based on weather, sunlight, rainfall, and other external factors.
Similarly, investors also know there will be external factors, or market storms, that they will face as they work to grow and preserve their wealth. So, they employ strategy, patience, and skill as the market inevitably moves up and down. Just as there are different vintages of wine, there are also distinct types of investors.
Figuring out your 'investor type' is an important place to start when looking for ways to navigate markets and avoid making irrational financial decisions. First, it is helpful to recognize whether you are an active or passive investor. Some subtypes also help to explain psychology. Here are a few descriptions to consider:
Which category describes you? You may identify with more than one description - a unique blend or varietal.
No matter where you fall on the spectrum of investment types, you should investigate investment strategies that feel like a match. Explore VGA's Strategies HERE.
Grapes require time to develop into fine wine. They cycle through many different growth stages. Similarly, an investor's lifespan also varies, depending on timing and goals. At VGA (Vineyard Global Advisors), we strive to find strategies that match your risk tolerance, income level, and time frame. Here are four investment stages to compare:
Knowing which growth stage, you fit into should help guide you to the investment strategy that will also match your investor personality. A great manager will work to balance the two.
"The best wines require time, patience, and a deep understanding of the practice required to bring out the optimal characteristics of the grape. At VGA, we believe time, patience, and deep knowledge of financial markets are critical elements that factor into each investor's success."
If you are uncertain about what steps to take to protect yourself during market volatility, find a manager who can define and manage that risk with you. Acting is the best antidote to uncertainty.
Do you ever wonder why people make irrational decisions and why the most reasonable solution seems like the hardest thing to do? The psychology behind this explains that emotions are often the cause. Past experiences and mental filters can guide you in the wrong direction. Having a trusted partner by your side is a great way to keep you on the right path.
A volatile market can push investors into irrational decisions. Some react like a deer in headlights, unable to move. Others become fearful of missing out and may react based on emotion or ego, making quick decisions without considering the consequences. Here are some key ways to stay on track with your goals:
Ultimately, creating an excellent wine or finding success with your investments requires patience and attention to detail. Vineyard Global Advisors offers a range of investment strategies designed to allow participation in the market's growth within a dynamic, risk-managed framework that seeks to protect against significant market declines. Our goal is to give our clients greater peace of mind by generating steadier returns over time.
