Investment profiling: the global financial system is undergoing a meltdown not seen since the 1930s. Most investments have been hit by substantial losses, and for many, it is unclear what to do next. Following is a basic guideline to determine which type of investor you are, so you'll be ready when it's time to jump back into the market.

AuteurDonnellon, Brien
Fonction MONEY

We have seen national economies stagnate for a decade or more in the past; for instance, the UK in the 1920s, the United States in the 1930s and Japan in the 1990s. While the experts do not predict a long-lasting global recession, failing banks, falling house prices, corruption, currency swings, volatile commodity prices--especially for oil--and rising unemployment are all contributing to the current lack of confidence and pessimism about the global economy's future.

Loss of confidence has spread from banks to become something very personal, with many of us worried about the future of our finances and employment status.

The widespread lack of consumer confidence is putting more pressure on the economy, and making it even harder for a rebound since would-be consumers simply aren't spending.

The U.S. recession that arguably began in December 2007 resulted in massive global job losses throughout 2008. The unemployment forecast for 2009 is even gloomier.

Also threatening a fast economic recovery, and resulting from the subprime mortgage crisis, is restrictive lending by banks to businesses. Such borrowing remains very costly for businesses, and in some cases impossible.

Behind the clouds

Optimistic economists believe that in 2009, falling food and fuel prices will give a boost to disposable income in most parts of the world. They believe the swift action already taken by governments to slash key interest rates and shore up financial institutions with fresh capital will pay off.

In fact, banks are beginning to lend to each other again since interbank lending rates have fallen. Further key interest rate cuts are expected soon in the United States, Eurozone and the UK, and most of the world's other central banks will likely follow suit.

Thus, when the time is ripe, you will have an advantage if you already know where you're best suited to focus your investment interests.

Which type of investor are you?

There are many different types of investor. An investor's profile can be determined by age, gender, income, wealth, family status and tax bracket. An investor's character and personal beliefs are also very important profiling factors. In general, investors are either bearish, believing that the market is going to decline in value, or bullish, believing that the market will increase in value.

Both bearish and bullish investors can be classified into the following types: aggressive, moderately aggressive, moderately conservative and conservative...

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