At the highest level you have just two types of people
buying stocks. One is Trader and the other is Investor.
Trader can be qualified as daily trader , weekly trader
and monthly trader.
Investor typically
hold on to his investment for a long time. A investor might be holding on to a equity anywhere
from 1 year to 10 years.
I shall try to perceive stock buyers in terms of their
risk taking appetite.
Low Risk Takers : They should invest in blue chips and
aim at long term gains (3 yaers and above) only. They need to adopt a buy and
hold strategy
Medium Risk Takers: They should invest in growth stocks
and aim at medium term (1 to 3 years). They should adopt a reasonably aggressive
strategy.
High Risk Takers: They should invest in turnaround stocks
and aim at short-term gains only (around 1 year). Adopting a very bold investment
strategy , they should go bargain-hunting.
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