What is meant by investor life cycle?
Answers
The investor lifecycle sees investors going through three basic stages in their investing career. These include the accumulation phase, the consolidation phase and the spending phase/retirement.
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Investor life cycle
Investor life cycle indicates the investment behavior of investor over the different age of their life. The investment decision is based on the age, financial condition, future plans and risk characteristics of an individual.
Investor mainly invests in getting a return which can compensate the sacrifice of present for more future earnings and security. As a financial plan investor can adopt different insurance policies or reserve cash for future. Although investor has to take risk of reserving cash or investing the cash they are ready to take some risk according to their risk-taking behavior.
Phases of Individual Investor Life Cycle
Phases of Individual Investor Life CycleFour Phases of Individual Investor Life Cycle
An investor passes through four different phases in life,
- Accumulation Phase
- Consolidation Phase
- Spending Phase
- Gifting Phase
Explanation: