Stocks vs. funds? Which investment strategy suits my personality better?

All of us who invest desire success, but the method for success in investing varies for each of us. Success in investing comes through growing your wealth. Growth requires an intelligent strategy built for your personality. A greater understanding of your personality and investment opportunities surely boosts your potential for long-term wealth growth.

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Let’s Think About Stocks and Funds


Importantly, if you’re already well-acquainted with these two investment-vehicle types, we invite you to skip to the next section of this informative piece.

You might think of stocks and funds as items at an ice cream shop. A stock is one flavor of ice cream. Now, you can select vanilla, strawberry or rocky road, but any flavor you choose will be limited to its specific set of ingredients.

If you want a wide blend of flavors at the ice cream shop, you must choose a sundae. The sundae of investing is the fund.

Let’s imagine a share price is a nibble of ice cream. A share of stock lets you taste just that sole flavor. Meanwhile, one share of a fund gives you a taste of, often, dozens of stocks. The exact number depends upon the decisions made by the fund’s manager.

Now, let’s exit the ice cream shop and consider some highlights of stocks and funds:


  • Gives you the opportunity to get incredibly rich
  • Can easily wipe out large chunks of your portfolio, even in a few hours
  • Requires your personal attention


  • Can make you wealthy, but will never make you one of the world’s richest people
  • Offers you easy diversification, which protects you from avoidable risk
  • Requires minimal attention from you

    Regarding Investments, You Fall Into One of Three Personality Buckets


    Humans are as diverse as the night sky. Yet, when it comes to investing in the market, we really fall into buckets:

    • Risk-taker
    • Risk-avoider
    • Hybrid

    Naturally, a risk-taker likes to gamble. They are not afraid to lose it all because they imagine they will have future opportunities to win. We’re not here to assess whether such a perspective is right or wrong. It just might not be for you.

    Clearly, a risk-avoider hates gambling. Risk-averse people are likelier to find comfort in a slower, steadier approach to investing.

    A hybrid take on the two previous personalities may be where you fall. Most of us do not live extreme lives. We appreciate the idea of sensible risk-taking, for example. This third bucket is the largest bucket.

    So, Is Your Personality Better Suited to Stocks or Funds?


    The risk-taker is wonderfully matched with the stock. Yet, there is a steep learning curve. Crucially, you must never call yourself a day trader. If you think of yourself that way, you’ve already lost. Trading is not investing. Over the long run, just like people who can’t walk away from slot machines, day traders universally lose money. That’s the blunt truth.

    Be a smart risk-taker. Dive deep into research before you invest in any stock, and always diversify across industries to protect yourself from volatility and other risks. If your risk-taking personality is combined with persistence and attention to detail, you’ll have the best chance to deal well over the long haul.

    The risk-avoider belongs within a fund’s safe harbor. A good fund does everything for you. An expert professionally manages the fund, or an artificially intelligent machine runs it. You don’t have to do any research, and it exposes you to the least risk possible in the world of investments.

    A hybrid personality may sample from the stock market and from various funds. If you’re in this bucket, your interest in researching investment opportunities will likely inform which vehicle you choose. Hybrid personalities may be the likeliest to own a selection of stocks and funds.

    Perhaps, This Is the True Investing Secret


    We all start as beginners when something is new to us. No matter our personality type, there is nothing wrong with starting by purchasing shares in a diversified fund. Next, you can grow, research, learn and understand the investment marketplace. Then, on your own schedule, you can build a broad stock portfolio featuring companies that match your growth goals and personal values. One day, you might be quite impressed by your own wealth.

    Always remember, we invest for the long run, so begin this endeavor ready to build something substantial.