Investor profiles are often (but not always) linked to your stage of life, which in turn is linked to your investment horizon.

Individuals generally have three lifestages:

Accumulation stage – This is the early earning period where you have relatively few assets and are facing significant debt
Consolidation stage – This is the later earning period where your income might comfortably exceed expenses and you have built a significant financial portfolio. You may use excess income to reduce debt
Financial independence stage – Where your living expenses are financed mainly through investment and pension income.

In what stage of life are you?

If you are younger, working full-time and not reliant on your investment to generate income, you may feel more comfortable with higher risk investments. Assuming you’re investing for the long term, your investment has longer to recover from any downturns, which means you can probably afford to take more risks.

However, if the thought of even a minor devaluation in your portfolio makes you nervous, you should consider more stable investments, such as cash and fixed interest option. If you are only a few years away from retirement, or if you rely on your investment to generate income, you’ll probably feel more comfortable with a more conservative investment option.

General Characteristics

Accumulation	Consolidation	Financial independence
Mid 20’s to mid 30’s	Middle age	Retirees (or pre-retirees)
Paid employment	Paid employment (perhaps female at home)	Retirement income
University/first home debt/car loan debts	Mortgage/renovation debt (50%+ paid)	10-30% mortgage debt (debt free)
Few assets	Moderate-substantial portfolio	Substantial portfolio
Long term investment time horizon	Mid term investment horizon	Short term investment time horizon
Higher risk taker	Moderate risk taker	Low risk taker
Growth style investments	Balanced-growth style investments	Conservative (income based) investments
Aggressive Investor Profile	Moderate Investor Profile	Conservative Investor Profile

While life stage is an important factor in determining your investor profile, it isn’t the only factor. We all have different incomes, lifestyles and goals. Before investing, we recommend you consult a professional financial planner to ensure that the decisions made suit your personal situation and financial goals.