Types of Investors in Stock Market

Understand 3 Types of Investors in Stock Market – Investment Potential, Risk Tolerance, Investment Style.

Understand 3 Types of Investors in Stock Market – Investment Potential, Risk Tolerance, Investment Style.

Types of Investors in Stock Market

Investors in Stock Market can be Grouped into following Categories:

#	Type	Investor
1.	Investment Potential	Retail Investors, Individuals with High Networth (HNIs), Domestic Institutional Investor (DIIs), Foreign Institutional investors (FIIs), Foreign Portfolio Investors (FPIs)
2.	Risk Tolerance	Aggressive Investors, Moderate Investor and Conservative investor.
3.	Investment Style	Value Investors, Growth Investors, Active Investors, Passive Investors, Speculative Investors and Retirement Investors.

Do You Know:

• Stock Market Sectors
• Rakesh Jhunjhunwala Stocks Portfolio

Investors by Investment Potential

Investors under this group have different investment potential. Some Invest Small Amount of Money and Few others can Invest Big Money. Investors under this Group are:

1. Individual Retail Investors

These are small investors who Buy or Sell Securities or Funds (Mutual Funds or ETFs) with amount less than Rs 2 lakhs. They use Normal Demat Account.

2. Individuals with High Networth (HNIs)

These are investors with investable assets over 2 Crore Indian Rupees. In case of Emerging HNIs this Amount is Rs. 25 Lakh to Rs. 2 Crore. Such Individuals have to apply for IPOs through a separate HNI Category.

3. Domestic Institutional Investor (DIIs)

These are Indian Institutional Investors including – Asset Management Companies (AMCs like – UTI AMC, Nippon Asset Management, ICICI Prudential AMC), Insurance Companies, Pension Funds and Banks.

4. Foreign Institutional Investors (FIIs)

Foreign institutional entities (Not Individuals) investing in Stock Market in India.

5. Foreign Portfolio Investors (FPIs)

They are Non-Institutional Foreign Investors – Non-Resident Indians (NRIs) or Overseas Citizens of India (OCIs).

Investors by Risk Tolerance

The above Types of Investors can Further be Classified as:

1. Aggressive: They are experienced investors who take high risk for high gain. They generally Invest in instruments like futures and options. Such investors generally have a Diversified Portfolio as Safety.
2. Moderate: These are less risk-takers and follow a Balanced Approach between Aggressive and Conservative.
3. Conservative: They are No-Risk Short-Term Individual Retail Investors. Their aim is to secure their Capital and they generally invest in Fixed Deposits, Provident Funds or SIP in Mutual Fund.

Investors by Investment Style

Investment style can broadly classified as:

1. Value Investors: They follow approach of fundamental analysis to identify Undervalued Stocks with Low PE Ratio and Invest for Long-Term.
2. Growth Investors: They follow strategy to increase their capital and invest in Stocks of New Companies with High Growth Potential.
3. Active Investors: They are very Active in the Stock Market and frequently Buy or Sell Stocks.
4. Passive Investors: They are Long-Term Investors who buy and hold Shares in their Investment Portfolio.
5. Speculative Investors: They are Investors with High-Risk Appetite and follow an Aggressive Investment Approach.
6. Retirement Investors: Investors with Low-Risk Appetite and Retirement Planning.

FAQs: Types of Investors

Conclusion

Hope now you have clear idea about the 3 Different Types of Investors in Stock Market. Please SHARE this Article with Others. Thanks!

Also Read:

• Stock Market 11 Sectors
• How Stock Market Works?
• Best Investment Options for High Return
• Ideal Number of Stocks to Buy in Stock Portfolio in India
• Share Trading Mistakes to Avoid
• Top 10 IT Companies in India by Market Cap
• Portfolio Vs Age – Portfolio and Age Relationship
• Top 200 Listed Companies in India