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Test to Measure Your Investment Skills and Performance

“Practice as if you are the worst, perform as if you are the best.” ~Anonymous

Being a successful investor to make fail proof investments, not an easy task. Investing is an art that required combination of investment knowledge and passion. Knowledge can be acquired from various sources, but not passion. Once If you feel you have all required qualities of a better investor, then try this simple questionnaire to measure how much knowledge exactly you have. This questionnaire carefully prepared to measure your investment skills and knowledge. Respond to this questionnaire and know what you are.

1. To choose a right stock to invest, which factor from the following you rely most? A . Research reports from various brokers that most of their customers trusting and making investment decision as per.
B. News reports and business information about the company.
C. Gather all the information about the company to do your own research.
D. Gather information from Financial portals and other available sources in the net.

2. What is your investment horizon when you buy stocks?

A . Over 6 years
B. 1-2 years
C. 3-12 months
D. 0-3 months

3. What is your expectation about possible returns from your investment?

A . More than 30% an year
B. 25-30%
C. 15-25%
D. 10-15%

4. Suppose you have found some fantastic stock available in the market for immediate buy, how do you manage money to buy this stock?

A . If you find it is the right time to invest in this stock, you will immediately arrange the money from relatives or friends because it is an emergency.
B. You will stop other low return investments and invest those money to this stock which able to give fantastic returns!
C. You will invest with any surplus amount lying idly on your various bank accounts by not considering whether it is too small to invest or sufficient.
D. You will take advantage from pledging or sell any gold or real estate sitting idly with you for long term.

5. Today, investors have enough options to get stock investment exposure. Investing through Mutual funds or ETF’s or so on. If you are the one not taking this path butt decided to invest directly to stocks, what factor from the below list support you most to take this decision?

A . You never interested someone managing your money as they wish but want to invest it as your own.
B. You would like to take the challenges of direct investing and enjoy the thrill.
C. You are confident to do better than others who managing money on behalf of you.
D. You never interested to take a path of systematic investment method where a small amount will be invested in each month. But, interested to invest substantially large amount as Buffett Says.

6. Suppose you have received a tip saying a particular stock will shoot to maximum in the near future. As a direct stock investor, what would be your possible approach to this?

A . You will first do a research as your own .
B. You will ignore the tip and do nothing.
C. Confirm the news from a reliable source.
D. You may invest a small amount to that stock.

7. Some day you have got a news that a blue chip stock crashed to 52 weeks law after poor quarterly result. What will be your action?

A . You will patiently wait until the price start going upward and invest in the stock.
B. You will buy a small quantity now to control yours inner feeling og getting a blue chip exposure and invest heavily later when the price start moving upward.
C. You will try to know the reason why this crash happened and start doing your own research to invest on this stock.
D. You will never miss such rarely getting opportunity to invest on a blue chip and invest heavily in this classic scrip.

8. Suppose the market crashed after you have invested some huge amount. Investors community caught with enormous panic. What would be your action?

A . You will do nothing but know this stock market volatility which later bring the stock prices up.
B. You will intelligently sell a part of your stocks to reduce your lose and invest this money to some good stocks presently available as cheap.
C. You will buy more stocks on that you have done your research earlier but was waiting for a right chance and thus average out your cost.
D. As a best practice, you will sell all your lose driven stocks at the earliest to reduce further lose.

9. Portfolio monitoring is an integral part of investments. How often do you check your portfolio?

A . Once in 3-6 months
B. Once in 1-3 months
C. Every week
D. Every day

10. What would be your action if a share exceeds the target price you had set and public still confident on the price will go even higher?

A . Sell a part of your stock to protect your capital and rest will keep as invested on the stock.
B. You will confirm the value of this stock and if found it fully priced, you never hear anyone and sell the entire holding as per your plan.
C. You may probably reset your target and awaits for the price touch your new target.
D. You will never make a mistake of not buying more stocks to get maximum benefit from its upward movement.

11. As an investor, you should define the stocks you most like. What kind of stocks do you prefer most?

A . You always prefer to buy blue chip stocks and not considering its price but considering the investment safety.
B. You will have invest on mid cap stocks that are reasonably priced.
C. You will identify small cap stocks that priced low and invest on selected stocks.
D. Penny stocks that can be bought in thousands to get another thousand in the next day.

12. A company you invested in is in trouble and there’s little chance of improvement in the near term. What do you do?

A. You will exit completely and book losses

B. You will sell some of the shares and hold the rest because still you have hope on possible improvement.
C. Hold them and wait for a turnaround. Problems are the integral part of companies.
D. This is your chance to buy more to average out the cost. You will buy more.

Now you might have answer to all the questions and let us see your performance:

1 C, 2 A, 3 D, 4 C, 5 C, 6 B, 7 C, 8 C, 9 A, 10 B, 11 B, 12 A

So you have now with your results. Now identify from which following group you are:

1. If you got right answer between 10 to 12:

Congratulations! You are in the right track, having most required investment knowledge to succeed and thinking like Warren Buffet. You are fully equipped to invest in stock market directly. Go ahead and start harvesting.

2. If you got right answers between 7 to 9

Not bad. You are doing just good but that is not enough to be a successful stock investor. You are still not qualified to invest in stocks directly. Identify which questions you have answered wrong and try to get knowledge on that area. Just visit to know about the details of best investment guides I have posted earlier in this blog. Buy the one by one cheaply from Amazon or eBay and read all these guides multiple times. You will later qualified as a right investor.

3. If

you got right answer between 4 to 6

You seems in the beginning stage and not having required knowledge to invest to stocks directly. My best advice to those falls in this category is, instead of investing directly to stock market, you should select the path of mutual funds or exchange traded funds to get enough equity investing exposure. As a parallel, you can acquire required knowledge using the similar way I have recommended to the people from above group. Remember, until you pass all the required marks in the questionnaire, it is better to give your money to the hand of carefully selected, responsible money managers. Give special attention to read the investment guide, Philip Fishers “Commons Stocks and Uncommon Profits”. Try to get it as cheap from some online books stores. As much as reading, that much this book worth you.

4. If your score is 4 or less:

My best advice to the people from this group is, stay away from direct stock investing. You have done very poor and not having even the basic knowledge of stock investing. Suitable investments for you could be guaranteed instruments. Invest in Bank Fixed Deposits, Money Market, Liquid funds, Fixed Maturity Plans, Pension Plans and Monthly Income Plans. You have lots of steps to climb. You can still acquire knowledge by reading some best guides to get and build your investing knowledge.