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Types of Investors/Clients


On September 12th, 2020, Adam went over the different types of investors on the weekly radio show. For those of you who missed it, here they are!

The Monday Morning Quarterback: This type of investor is very good at pointing out how he should have been invested over the last year or quarter.  He will look at returns for different asset classes or stocks over that time period, pick the best performing one, and then question why he wasn’t invested 100% in that. This type of investor will never be happy with their portfolio performance and will never be happy with a financial advisor.

The Nervous Nelly: This type of investor is always worried that the market is overvalued when it is doing well and will never bounce back when the market is doing poorly. There are no market conditions that look good to the Nervous Nelly, and any drop in the market, no matter how small, will warrant a call to their financial advisor. Sometimes, even a drop in the futures market, which they have decided to check at 5:00 AM, will warrant a call to their advisor. This type of investor is typically better off in an annuity or in bonds and CDs when yields are high enough to buy those products.

The Know It All: The know it all hires a financial advisor simply run ideas by the advisor that they are sure are correct.  They do not want advice, and they certainly do not want you to manage their money, they just want you to bless their (usually poor) decisions that they have already made. The Know It All not only makes bad choices for themselves, but with the approval of an advisor they feel confident doing so.  When it does not work out in their favor, lawsuits can result.  Avoid the Know It All as a client at all costs.

The Return-Chaser: This type of investor always wants to re-balance their portfolio, but in reverse.  They would gladly sell all asset classes that have underperformed over the quarter and buy everything that did well.  Many individual investors fall in this category. In the short-term, this type of investor can perform very well.  In the long-term, this type of investor will end up under-diversified and under-performing a balanced portfolio. 

The Newsletter Subscriber: This type of investors pays money to follow a guru of some kind, or many gurus in some cases. Because they have shelled out $12.99 per month, they are obligated to follow all investment advice from said guru, no matter how sound the logic or reason is behind the advice. Meanwhile, their financial advisor, who they are paying more than $12.99 per month, takes a back seat to said newsletter. 

The Unicorn: These are my favorite type of investors because they have never gotten a trade wrong, they have never made a mistake, and they were getting along just fine without you or anyone else helping them.  They bought Amazon, Facebook, and Google at the IPO and never sold, and they shorted tech stocks in 2001. Their account has crushed the S&P every year for 30 years. And yet here they are sitting in your office, looking for a financial advisor.  I wonder why. 

The Perfect Client (Or Almost Perfect Client): This is a description of  our clients. They are interested in their money and how their investments perform, but they understand that they hired us to manage it for a reason. They can have intelligent conversations with us about their investments and make suggestions, but they trust our guidance and listen to our advice. They can sometimes disagree with our opinions, but are able to reach an understanding with us about an investment plan.