1. Investor personality types:
Presentation by:
Anup Pandey
Roll num:05

2. • The investor personality test can be used for a
quick overview of the type of investor your
client is:

3. Investor behavioral classification:
It has been explained by using two models:
1. Bailard, Biehl, Kaiser (BB&K) model.
2. Barnewall model.

4. Five way model:
Level of confidence on the vertical axis.
Method of action on the horizontal axis.
Individualistic Adventurer
CONFIDENT
Guardian
Celebrity
ANXIOUS
CAREFUL IMPETUOUSSTRAIGHT
ARROW

5. Description:
• The Adventurer: People who are willing to
put it all on one bet and go for it because they
have confidence.
• Difficult to advise
• Willing to take risk
• Volatile clients from an investment counsel
point of view.

6. • The Celebrity: These people like to be
where the action is. They are afraid of being
left out. They really do not have their own
ideas of investment.
• Best prey for maximum broker.

7. • The Individualist: These people tend to go
their own way and are typified by the small
business person or an independent professional
such as lawyer, CA or engineer.
• Trying to make their own decision in life,
• Carefully going about things,
• Certain degree of confidence,
• Rational investors with whom the portfolio
managers can talk sense.

8. • The Guardian: Typically as people get older
and begin considering retirement, they approach
this personality profile.
• Careful and little bit worried about their money.
• Preserve their assets.
• Not interested in volatility or excitement.
• Lack confidence in their ability to forecast the
future and look for guidance.

9. • The Straight Arrow: Well balanced,
cannot be placed in any quadrant and hence
fall near center.
• On average this group of client is the average
investor.

10. Barnewall model:
• Marilyn MacGruder Barnewall’s psychographic
investor model distinguish between two
relatively simple investor types:
1. Passive investors
2. Active investors

11. • Passive investors are those investors who
gained their wealth passively.
Includes professional like Corporate manager, CA, lawyers,
medicos, politicians, bankers, journalist etc.
• Active investors are those individual who have
risked their own capital in order to earn their
wealth.
• Their tolerance of risk is higher than their
need for security.
Entrepreneurs are active investors.

12. The Eight investor Personality types:
Visual depiction is as:
Idealist(I) Pragmatist(P)
Framer(F) Integrator(N)
Reflector(T) Realist(R)
So there are 8 possible investor personality types:
IFT, IFR, INT, INR, PFT, PFR, PNT, PNR

13. Idealism/ Pragmatism (I/P)
• Idealist end: Overestimate their investing
abilities.
• Display too much optimism about capital market.
• Don’t seek out information that contradicts their
views
• Often disinclined towards thorough research,
they fall prey to speculative markets fads.
• They are subject to the following biases: Over-
confidence, optimism, self-attribution, illusion of
control, repetitiveness etc.

14. • Pragmatists end: Display realistic grasp of their
own skills and limitation as investors.
• Not too over confident about the capital
markets and demonstrate a healthy dose of
skepticism regarding their investing abilities.
• Do research for confirmation.
• Typically not susceptible to the mentioned
biases.

15. Framing/ Integration (F/N)
• Framers tend to evaluate each of their
investment through a particularistic lens and don
not consider how each investment fits into an
overall portfolio plan.
• Too rigid in their mental approach to analyze
problems.
• Framer’s portfolio appears to comprise
disassociated “pots” of money rather than a
composite of complementary interrelated
investment.
• Susceptible to biases like: Conservatism, mental
accounting, ambiguity etc.

16. • Integrators are characterized by an ability to
contemplate broader contexts and
externalities.
• Correctly view the portfolio as system whose
components can interact and balance one
another.
• Flexible in approach to markets.
• Not susceptible to the biases.

17. Reflecting/ Realism(T/R)
Reflectors have trouble living with the
consequences of their decision and have difficulty
taking actions to rectify their behaviors.
Justify and rationalize incorrect actions and
hesitate to own up decisions that have not
worked out beneficially.
Susceptible to these biases: Cognitive dissonance,
endowment, self control , regret, status quo,
hindsight etc.

18. • Realists have less trouble coming to terms
with the consequences of their choices.
• Don’t tend to scramble for excuses in order to
justify incorrect actions.
• Assume responsibility for their mistakes.
• Easier time with decision making under
pressure.
• Not susceptible to any biases.

19. Thank you!!!