12 types of investments and the traits of their investors

If you read personal finance and investment commentaries – blogs, forums, websites – you’ll notice a pattern: people who prefer investment X tend to be type Y.

Many personal finance and investment experts say, “Select an investment that works for you”, but what does that mean exactly? How do you choose from different types of investments?

Well, maybe the compilation below may help. It consists of the different types of investments available in Malaysia, and the defining traits of each type of investor.


Investments and who invests in them

1. Property

Typical investor…

  • Always checks out properties. Particular about finishings, surrounding amenities, and distance from public transport and major highways.
  • Checks for rental demand or appreciation rate before making a purchase.
  • Follows news of major developers, and aware of who is reliable and who is dodgy.
  • Tends to be better at spatial intelligence. Knows how to get around an area well and likely aware of shortcuts.
  • If they lack capital (money) to buy property and/or don’t want to deal with tenants, they may opt for REITs.

2. Unit trusts/mutual funds/ETFs

Typical investor…

  • Prefers another party to handle their money on their behalf. May or may not know how the money is being invested, but ultimately doesn’t care as long as it generates average profit.
  • Prefers long-term, stable and safer approach to investing. Cares about cost of retirement.
  • Might have unit trust investment as part of their insurance too.
  • Unless they have in-depth knowledge, they may pick a particular unit trust/mutual fund investment based on recommendations from an agent or friends. For example: “I got this one because my agent said at my age I should concentrate on growth funds.”
  • If they have in-depth knowledge, they will pick based on type and/or location because they believe it will be profitable (might be true, might not be). For example, “I want to invest in developing countries in Asia Pacific” or “I want to invest in precious metals” or “I want to invest in real estate in Asia.”
  • Might not know how much their fund manager charges them as management fees (it usually ranges from 1%-5%).

3. Stocks (Blue Chip)

Typical investor…

  • Finds high-level company drama interesting. Follows major announcements of big companies via business publications, websites, social media.
  • Probably a white collar worker in an MNC.
  • Likes a company immensely before buying their stocks.
  • Enjoys free tickets/events/gift baskets/other goodies that companies give them.
e-zara / Pixabay.

4. Equity Crowdfunding (ECF)

Retail investor…

  • Usually someone who has heard or may be using the services of a startup, and believes in its potential. Because emotions are in the way, the hunch may or may not be correct.

Angel investor…

  • Typically financially wealthy, and where losing money from startups that fail will annoy, but not hurt them financially.
  • Might be philanthropic as they only invest in businesses they believe in and which reflect their values.
  • Probably attends many networking events as they usually hear of these startups via word-of-mouth.
  • Wants the startups they support to become unicorns.

5. Fixed Deposits (FDs)

Typical investor…

  • Likes surety, prefers small profit over no profit. Compares rates from banks and takes advantage of special offers.
  • May use it as a way to lock their savings somewhere they can’t touch.
  • Attractive to non-Bumis (as this is the best safe alternative to ASB).
Stevebidmead / Pixabay.

6. Gold/Silver

Typical investor…

  • A bit old school as prefers “tried and tested” route. Knows that gold (and to a lesser extent, silver) can be used to hedge against fiat.
  • Might hold gold coins or bars and willing to pay safekeeping services to store it.
  • Will buy “e-gold” issued by banks or private companies as it’s safe although margin is not the best.
  • Might be attracted to e-gold issued by private companies but might not know that private companies are a lot riskier than banks – they have a risk of losing their investment if the company folds/is a scam.
  • Some consider gold jewellery an “investment they can wear”.

7. Art/Antiques/Jewellery

Typical investor…

  • Usually wealthy and art/antiques/jewellery are “fun” investments.
  • Surrounds themselves with art. Tends to appreciate good interior decor.
  • Familiar with names like Sotheby’s and Christie’s.
  • Probably a history buff. May feel inclined to a particular period of a particular nation (for example, Ming Dynasty). Collects items from this era for fun.
  • If not a history buff, they probably are drawn to modern/contemporary art.

8. Fiat currencies – government-issued money, like RM or USD

Typical investor…

  • Follows world news religiously. Cares about new laws, policies and regulations, particularly regarding trade and finance.
  • A forex trader, and may dabble or take a course in technical analysis.
  • Probably tried a few trading platforms before sticking with one.
  • Might have learnt importance of stop loss the hard way (or heard horror stories about it).
  • May also dabble in commodities.

9. Hedge funds – strategy-focused high-risk, high-reward investments

Typical investor…

  • Idolises George Soros, or greatly respects him.
  • Very rich. Probably a high net worth or ultra high net worth individual. Has a fund manager as likely too busy for DIY investing.
  • Believes in and has no problem borrowing money to make money (leveraging).
  • Hedge funds are not that common in Malaysia, so these people probably mingle more with international folk and gets advice/tips from them.

10. Cryptocurrencies

Typical investor…

  • Maybe likes the internet too much.
  • ascinated by technology behind it (blockchain). Sometimes compares cryptocurrencies to penny stocks for its “unlimited potential”.
  • Takes (or should take) digital security seriously.
  • Aware it’s a high-risk investment and willing to take the hit from price volatility/swings.

11. Get-rich-quick schemes

Typical investor…

  • Thinks they’ve found a “hidden gem” investment that is both (i) high profit and (ii) easy.
  • Attracted by: “Guaranteed Profit!!”; “Passive Income”; “Easy Money”; “Fast Paying”; “Start with $xx, earn $xxxxx”.
  • If the investment delivers profit, tends to give positive word of mouth about it to friends and families and encourages them to join too. Why not? They can earn referral profit while “helping” others grow rich. It’s win-win.
  • More prevalent in tight-knit communities, especially if promoted by community leaders (teachers and ustads).
  • If they get in the “programme” fast, they might make money. If they join an oversaturated programme, they will probably lose money.

#12 P2P (peer-to-peer) lending platforms

P2P lending platforms are a relatively new way to invest money and connects ordinary people who are willing to lend money to others, in exchange for an agreed interest rate.

It can be risky, but measures have been put in place to ensure investors’ interests are protected. In Malaysia, only these six platforms are recognised by the Securities Commission. These are companies, not individuals.

Typical investor…

  • Probably obsessed with fintech, or heard about it via word of mouth.
  • Knows all about supply chain financing and invoice financing.
  • Favoured by people who like short-term investments, as little as a few months. They might invest in P2P lending as an alternative to (low-interest) fixed deposits.


Many, if not most investors don’t fall into just one category – they might diversify their investments.

The smartest among them will have more safe investments than riskier investments because they know that long-term investing is best.

This article first appeared in ringgitohringgit.com

Suraya is a corporate writer-for-hire and the blogger behind personal finance website Ringgit Oh Ringgit. She is more of a minimalist, less of a consumerist, a konon DIY enthusiast, a let’s-support-small-businesses-over-big-corporations kinda girl. Prior to her current role, she worked in various capacities within the non-profit industry.