When investing in the stock market, your behavior in investing money dictates what kind of investor you are. Currently, there are two kinds of investors existing in the stock market. A reactive investor is one who is “in the know” about the trends and current situation in the companies he or she invests in and how the local economy affects such industries. A systematic investor is one who only adjusts their investments for a given time.
A reactive investor is one who invests on stocks depending on the circumstances surrounding the entire economic situation. The approach of reactive investors is based on calculation that would ensure them no to minimal losses while increasing their profits. Most of their daily transactions are dynamic and they tend to make use of day trading.
A systematic investor is one who has a set rule guide that they’ve made through years of experience. They make use of calculated risks and only adjust their stocks and bonds occasionally. They do not react to any economic situation all at once like the reactive investor.
A reactive investor may invest a great deal on gold and other rare commodities when inflation happens and may buy more defensive stocks and bonds when there’s an economic challenge ahead. A systematic investor will take only calculated risks just to achieve balance, often having a balanced set of stocks and bonds to sort things out.
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