Personality traits can color investments

How you invest reflects who you are.

People don't think exactly alike about money, which is a painful reality in many households. Although better judgment or spousal pressure can overcome questionable natural tendencies, the struggle with one's inner self is never easy.

"We love or hate money, we fear or worship it, but we certainly never ignore it," said Stacy Francis, a certified financial planner and president of Francis Financial Inc. in New York. "Money personalities explain people's behavior in terms of earning, spending, gifting, borrowing, saving and investing."

Formed in childhood, the money personality becomes a strong indicator of a person's risk profile and ultimate investment performance, Francis said. An individual may identify with a number of traits but has one primary personality affecting financial aspirations and emotions, experts said.

"You have to look at these personality issues head-on and not sidestep them," said William Wright, a certified financial planner and president of Guidance Financial Consultants Inc. in Wichita, Kan.

With that admonition, the following are common investment personalities. Deciding which one you resemble provides perspective on past and future decision-making. The label assigned your nature will vary, but financial planners say the traits are not unique.

• The hotshot: This free-spender views life and investments as a roll of the dice, willing to assume risks because "it's only money."

"We show them why a system of big bets doesn't work, since they'll shoot themselves in the foot and their financial planning just won't work," said Matthew Chope, a certified financial planner with the Center for Financial Planning Inc. in Southfield, Mich. "They take too much risk, so we try to change that through education or persuade them to do business elsewhere."

Such gamblers love excitement and the odds, said James Hatton, a certified financial planner and vice president with Hatton Consulting Inc. in Phoenix, but any individual who considers it possible to consistently beat the market is asking for trouble.

• The church mouse: Afraid to get burned, this investor stashes money in the lowest-interest accounts because it is always better to be safe than sorry.