BB&K Model and Types of Investors
Many have tried to categorize individual and institutional investors to different categories based on their investment goals, risks, position sizing and more. One of the most successful classification system is the Bailard, Biehl and Kaiser or BB&K model which categorize individual investors to 5 categories.
The major factors which make one investor fit to a category are his definition to risk and time horizons, his understanding of market and market factors and his fear and greed. One cannot permanently put an investor in one category as his trading style, market understanding, profit goals, all change with change in time.
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- Individualist investor – these are do-it-yourself kind of investors who make their own trading strategies and their own trading decisions. They do so after proper analysis and research.
- Adventurer investor – these are strong will (can also be greedy) investors who takes more risk to have more profit. They are noticeable with their high position sizing, trading in volatility and institutional investor like approach.
- Celebrity investor – these are investors who always look for the ‘hot’. They try to keep in touch with the latest strategies, news and fad. Usually they do not have any clear cut position sizing or asset allocation strategies.
- Guardian investor – these are investors who try to guard their wealth rather than accumulate more wealth. They always look for less risky investment options and they invest only after thorough analysis.
- Straight Arrow investors – these are investors who has all or some characteristics of above investors.
The major factors which make one investor fit to a category are his definition to risk and time horizons, his understanding of market and market factors and his fear and greed. One cannot permanently put an investor in one category as his trading style, market understanding, profit goals, all change with change in time.
NobleTrading.com Offers Online Stock Trading, Online Options Trading
Online Futures Trading, Online Forex Trading
Worldwide Brokerage Service, Day Trading Brokerage
posted by Daniel Pipitone at
5:57 AM
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