A Personality-Driven Portfolio? Here’s a book on it

In an earlier post, I shared about what I wished I knew earlier before I started investing.

Other than developing clear goals and having an investment philosophy, awareness of one’s own personality and temperament will go a long way in achieving success in financial markets.

But how does one tailor the knowledge of one’s personality into the process of investing and portfolio construction?

A book that may help investors in this endeavour is Sam Phoen’s ‘Personality Driven Portfolio‘.

personality driven portfolio

The author, Sam Phoen, is an investment professional with decades of experience at a range of financial institutions, including stints at a sovereign wealth fund, a hedge fund as well as a bank. Mr Phoen is also a Chartered Financial Analyst (CFA).

The book is segmented into three main portions:

(I) Understanding Your Personality & Needs

(II) Constructing Your PDP

(III) Managing Your Portfolio

The first portion consists of short quizzes that will help the reader assess his or her own personality and temperament. Being as honest as possible during this portion is crucial – it is self defeating if one isn’t honest as the next two sections are built upon the knowledge and results of this portion.

The author believes that certain personality types are more appropriate for certain kind of strategies, and goes to the extent of illustrating examples. However, the author explained that different strategies are not mutually exclusive from one another, and could be combined and employed together depending on the personality type of an investor.

For example, for investors who tend to sit on positions and are slow in cutting their losses or in taking profits, they could allocate more resources and time to holding dividend-related stocks or income instruments. But they could also in a portion of their portfolios in growth stocks. This is all explained in part II.

Asset allocation is also expounded, and this is where it may be useful for investors trying to figure out how to properly implement an asset allocation that is suited to their temperament and consistent with their objectives.

The writing style is casual and simple, and readers can appreciate the low level of technical jargon in the book.

Although the author did mention various hypothetical strategies briefly, I like the fact that it does not cover much about investment strategies and tactics. That isn’t its focus. The author emphasised that the onus is on the investor to find out about his/her personality first before going about devising an investment strategy.

I highly recommend this book for investors who are starting out or less experienced. For seasoned or professional investors, this book will only serve as a refresher. It may also not be as useful for those who have already fashioned strategies by themselves and are consistently profitable.

The book can be purchased from publisher Marshall Cavendish.

Rating: 3.5/5

‘This book is particularly suitable for investors who despite having a good knowledge of financial instruments are not quite able to enjoy their investing journey. The missing element is often not factoring in your personality… After reading this book, you should be able to see a distinct change in the quality of your journey.’

~ Gerard Lee, CEO, LionGlobal Investors Ltd


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