HARE OR TORTOISE, WHO ARE YOU?

Stock Market | Published on Mar 04th 2016 | Comment(s) 0
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Being an investor needs discipline, patience and a set of goals depending upon your requirements. There are different kinds of investors but broadly they can be divided into two categories based on the most important factors of investments, risks, returns, and time.

Before moving forward to these categories, it is better to point out to one of the very first parables that people learnt as a child: The Hare and the Tortoise. Nursery fables contain great lessons when it comes to career and business and this particular fable has some really interesting analogies about investing.

While the hare was the crowd favourite and went on to almost win the race, but the tortoise beat him fair and square because the hare grew overconfident and decided to take a nap in the middle of the race.

One can possibly conclude that the hare represents investors with a short-term point of view while the tortoise are the ones who are in for the long haul. That does make the entire thing sound judgmental and a bit biased but in reality both the hare and the tortoise are different breeds of investors that co-exist simultaneously in the market, reaping profits from the seeds they have sown.

It all depends on your risk taking appetite and timeframe to determine who you are. Both the hares and the tortoises have their own ways of functioning, something that is noteworthy.

The Hare:
The gamblers. The risk-takers. The fortune hunters.

These three words describe the hare in the best possible way. This breed of investors are looking for short-term profits and quick as well as easy ways to make money in the stock market. They are willing to take a lot of risk and put up huge sums of money to reap greater profits or sometimes lose great sums of money as a result.

Even the best traders falter and generally any risky venture can go either way, it’s just a matter of picking yourself up after committing a mistake and learning from it, so that you don’t repeat it again.

The Tortoise: 

The ones that play safe in the stock market are usually the tortoises. They know they are in for the long haul. But what makes the tortoise appealing beside the hare is that it is calculative and takes its decisions very carefully. It is slow yet steady and builds up momentum as time passes. Being in the market with a long term attitude helps, especially if you are investing in the equity market where a longer investment window obviously helps reap large profits at the end of the tenure.

While the hare exhibits an attitude that is suited for short term money markets, bonds and securities, the tortoise is more suited for equity funds, mutual funds and bond funds that have a way of getting appreciated in the long term. The hare can get overconfident at times because of the high stakes gambling nature of short term investments and hence it might falter after a series of successful investments. The tortoise too might not end up making much profit due to its risk averse nature. The hares can work fast while maintaining quality and the tortoise can reach its long term goal steadily by investing carefully.

It is up to you, your risk-taking appetite and your outlook that will decide what you want to be and who you are.




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