ET Money recently released an exclusive report titled “India Investment Personality Report 2022”. Investor Personality assessment assesses investors on four key parameters of risk tolerance, loss aversion, financial mastery, and overconfidence levels and draws a map of their unique investor psyche.
The assessment gives investors 8 unique Investor Personality tags that are closest to the type of investor they are. The report reveals that the majority of Indian investors are Strategizers (35%) – a type of investors who are action takers willing to take calculated risks. This is followed by Explorers (31%) – investors who are smart and, at times, overconfident risk takers.
As per the report, Indians have an average risk tolerance range between 52 and 81 which means they are comfortable taking a decent amount of risk when it comes to investing. While high-risk tolerance can deliver good outcomes over the long term, the report also shows that investors with low-risk tolerance are also investing heavily in equities, indicating risk-taking capacity is being ignored. The report further indicates that the majority of Indians have low comfort levels concerning incurring losses. Yet they are taking high risks, which is bound to make them uncomfortable during market volatility.
In addition, Indian investors with high financial mastery are making strategic lump sum investments along with their ongoing SIPs as opposed to investors with lower financial mastery who are sticking to only SIPs. Further on the positive side, women investors are seen to be more organized and well-planned, which is evident with them having a higher share in personality types of Strategizers and Researchers compared to men.
Mukesh Kalra, Founder and CEO of ET Money, said, “Your investment biases impact how your money grows. And being aware of these biases can help you make smarter investing decisions. Making better decisions starts with decluttering your thoughts and seeing what is driving your investment decisions.”