Financial Personality Discovery - Paul's Story

Paul was a 48-year-old seasoned investor. A former investment manager at an international funds management firm, he now ran his own consultancy, and was an active and passionate investor in industrial stocks.

Paul participated in the Financial DNA process out of curiosity more than anything else. Most striking for him was what the first stage of Financial DNA, the Core Life Profile, said about his inherent tendencies towards risk. Paul had participated in quantitatively-based risk profiles before, but the results (which were always that he was a ‘high risk’ investor) never sat well with him.

Financial DNA uncovered that Paul had a good understanding of stocks and was prepared to accept their price volatility, but his inherent predisposition to risk was quite low.

Even though Paul only invested in one asset class, industrial stocks, he viewed his strategy as low risk for several reasons:

• He researched companies well before investing in them, and only invested in those companies whose balance sheets and products he understood intimately;
• His portfolio was diversified across 200+ companies;
• He only invested in those industries which had historical success;
• He had a long-term strategy which protected him against day-to-day and even year-to-year volatility risk in the stock market (which he declared was not a risk at all, as he never intended to sell his investments).

Because Paul had actively pursued what he considered to be a low-risk investment strategy, he had of course never accepted any risk profile that categorized him as a high-risk investor. So, when seeing his Financial DNA results for the first time, they struck a chord with him because they articulated what he had known about himself for a long time.

The other outcomes of Financial DNA for Paul were nothing he hadn’t expected. However, he nevertheless found the results liberating because it confirmed that the success of his investment approach had largely been because he had invested with a great deal of alignment and commitment to his investment principles.

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