You're smart but do you have an investing winner's psychological makeup? Take the test.
"Success in investing doesn't correlate with IQ once you're above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing." Warren Buffett
If you were interviewed for the post of investor, would you get the job? The interviewer would surely be looking for someone like a Soros, Buffet or Munger. Some companies use a psychometric test to at least attempt a more objective measure of the interviewee. These tests then ascertain your personality type.
A free online test takes about 10 minutes. Then you can look up your type.
Do you have an investor temperament?
From your four letter personality type (e.g. ESFJ) look up the temperament by matching two letters from the four:
| SJ (Guardian) | NT (Rational) | SP (Artisan) | NF (Idealist) |
|---|
Investment Strength | Discipline, execution | Creative analysis | Risk seeking | Collaboration, intuition |
Investment weakness | Too rigid | Too theoretical | Too reckless | Too Idealistic |
| Examples | John D. Rockefeller, Bill Clinton, Sam Walton (founded Wal Mart) | Warren Buffett, Charlie Munger, George Soros, Bill Gates | Clint Eastwood, Paul McCartney, Ernest Hemingway, Madonna | Lenin, Trotsky, Abraham Lincoln, Abraham Maslow |
Taken from: The Psychology of Money: An Investment Manager's Guide to Beating the Market by Jim Ware
Buffett's right-hand man, Charlie Munger, has said his best quality as an investor is being rational and sure enough both he and Buffett are Rational types. Many equity analysts are Guardians who thrive on detail and process. If you are an Idealist or Artisan then maybe you should buy an index tracker so you have time to overthrow the system or star in a musical western.
Two steps to Mammon
There are two parts to making money with shares. Working out an investing method that makes sense to you is the easy part. Sticking to it is where most fall down. If you are easily swayed by others you will find that the market is the devil and will do its best to tempt or frighten you onto a false path. If you have an inner certainty, the market will be your best friend and will from time to time offer to trade at silly prices, prices to your advantage.
What about me? I'm perfectionist, I need to know how things work and I plan to avoid failure. I was an engineer before I turned my hand to shares. I'm introverted, intuitive, thinking and judging -- INTJ, a classic value investor type.
Whatever your temperament, self knowledge is a valuable commodity which you can use to set a course away from your personal investing whirlpools.
More:Quick Personality test | The Four Temperaments (Kiersey) | Investing with Style: Diversity Style and the Investment Process (CSFB)
