- Date : 28/09/2021
- Read: 4 mins
Which animal trait typifies your investing style? Read this article to find out
The stock market is a financial jungle, and different investors cue in with different investing styles and personalities that make stock markets so dynamic. There are numerous investing styles and personalities and as many stock market animals. If you want to know which animal means the stock market is doing badly, or which one represents investing prudence or greed, read on and see which animal(s) traits mirror your investing style.
The raging bulls are investors who are optimistic about the prospects of the capital markets. They believe stable economic and social factors will help drive consumption demand, reduce unemployment, etc. which will have a snowball effect on the stock markets. With the confidence that share prices will rise, bullish investors are ready to go horns-up and invest more money.
Bears are on the other end of the spectrum and tend to be pessimistic about market performance. This falling stock market animal believes that swiping down economic and social factors will erode their wealth; hence, they would rather liquidate their position before things get worse.
Rabbits are known to be quick and impulsive. Investors who demonstrate a similar trait stay invested in a position for only short periods of time – ranging from intraday positions to a few weeks. They aim to make a quick buck on their investment, but usually a lot of that rides on luck.
You’re no doubt familiar with the fable, so you’ll know what investment mentality tortoise investors demonstrate. They are slow yet steady in their resolve to compound their wealth. These investors will invest in stock or mutual funds systematically for the long run and keep plodding on, irrespective of volatility or trends. Tortoises always win in the end.
Of all the share market animals, you surely don’t want to be a chicken. Just as to fodder, they are drawn to stocks merely on the basis of random tips or hearsay. And it doesn’t take much time for their sentiments to shift. Such investors panic if the markets take even a minor tumble. Due to their unstable reactions, chickens usually tend to lose more than they gain.
Investors whose expectations turn to greed are often referred to as pigs. They are known to be impatient and will take any amount of risk in a bid to make a quick buck. While such investors may gain a little initial success, over the long term, pigs are known to badly burn their fingers. As the wise old stock market saying goes ‘Bulls make money, bears make money, pigs get slaughtered’.
These are investors who blindly follow suggestions from friends, family, WhatsApp forwards, or TV anchors. They react to trends without analysing if the suggestion works for their goals. Because of their herd mentality, sheep are the last to capitalise on a bull market and take the brunt of losses in times of a bear market.
There are many investors who believe their actions are always right. They seek confirmation bias that supports their beliefs and disregard views that don’t. Just as the ostrich buries its head in the sand to cut out reality, these investors too turn a deaf ear to information that does not align with their thought process. Naturally, being blindsided by your beliefs can harm your investments.
Wolves describe powerful individuals or a group of people who employ unethical means to make money. A group of investors or promoters may employ ’wolf-hunting’ tactics to operate penny stocks or drive one down by short-selling for personal gains.
Influential investors or institutional entities or FIIs with deep pockets are often referred to as whales. Their mega-sized actions have the potential to impact the stock markets, and other small investors keep an eye on the whales to know where the markets are headed.
So, which of these 10 animals most resembles your stock trading personality?