Introverts, as investors: Introverts tend to analyze and ponder each financial decision before they act. “Introvert brains are programmed to pull in a lot of information, reflect on it, and play out scenarios in their heads before they act,” explains Helgoe. “They rarely get distracted by immediate rewards.” However, because introverts are naturally more risk-averse, they may miss opportunities.
Investing strategies for introverts
- Force yourself to take some risks. Your natural inclination toward caution protects you from making bad decisions, but it can also prevent you from trying something new or taking calculated risks that will grow your portfolio. If your portfolio leans conservative, ask your financial advisor to set aside some money in a separate pool. Then draw from that pool the next time your advisor recommends a new type of investment that looks a little risky, and see how it feels. “It’s a lot easier to take a calculated risk with a small subsection of money that you can actually afford to lose,” Gresham says. “Make sure your advisor knows that you need him or her to push you out of your comfort zone.”
- Build a diversified portfolio. You can’t make money without taking some risks, and diversification helps protect you from long-term volatility because you’re not putting all your eggs in one basket. Your advisor can make recommendations based on your goals.
- Don’t get bogged down in the details. You love analyzing data, charts, reports, and metrics before making a financial decision. But “introverts sometimes spend too much time in contemplation and miss an opportunity,” Helgoe says. For example, many introverts missed the opportunity to buy when stock prices were low at the end of the 2007 recession. Ask your advisor to alert you when you need to act quickly on a decision.
Asset allocation and diversification cannot eliminate the risk of fluctuating prices and uncertain returns nor can they guarantee profit or protect against loss in declining markets. All investing involves risk, including the possible loss of principal.