Skip to main content.

Please be aware you are using an unsupported web browser.

Because of this, you are viewing an HTML only version of Sorted.

You can find more information about the range of supported browsers on our technical help page here.

Please contact us if you are still having problems.

The Sorted Team

Upgrade now. Upgrade to the latest version of Chrome (opens in a new window). Upgrade to the latest version of Internet Explorer (opens in a new window). Upgrade to the latest version of Firefox (opens in a new window). Upgrade to the latest version of Safari (opens in a new window).

Your investor profile

Knowing your investor profile will help you work out the kinds of investments you should consider. There are four sides to your investor profile:

You may have a couple of different investment goals. Say you’re saving for an overseas holiday, and saving for your retirement at the same time. You'd have separate investor profiles to match each goal, and the best investments for you will be different in each case.

When you consider... Ask yourself...
Duration How long do you want to invest for?
Returns Do you want income or growth?
Liquidity Do you need to get to your money easily?
Risk What balance of risk and reward is right for you?


Duration means how long you want to invest for.

  • Short term – 1 to 3 years
  • Medium term – 4 to 9 years
  • Long term – over 10 years

Money you are saving to go overseas in a years’ time is a short-term investment. So you need to make sure you'll be able to get it when you need it.

Money you are saving to put towards a deposit to buy a house in five years time is an example of a medium-term investment.

Money you are putting away for your retirement is usually a long-term investment. Over a longer period of time you'll be more interested in capital growth.

This is when the value of your investment (your capital) grows. If you invested $100,000 in shares last year that are worth $110,000 this year, your capital growth is $10,000, or 10%.

It's common to have different investments of different durations.

Returns – income or growth?

To work out the type of returns (the money you earn from your investments) that will suit you, ask yourself if you're more interested in income or growth.

  • Do you want to use the money your investment earns as income to live off during the duration of the investment?
  • Do you want to reinvest it with the original lump sum, and grow your lump sum as much as possible?

If you need short-term income from your investment, it's probably best to put your money where you can guarantee how much money it will earn. For example, a bank deposit paying a fixed amount of interest for a set period.

Want to grow your lump sum as much as possible and don't need the income in the short term?  You could consider investments that don't guarantee the return from year to year, such as shares.


Liquidity means how quickly you can convert your investment into cash before the end of your investment period.

High-liquidity investments mean you can get at your investment anytime. A bank savings account is the best-known example of a high-liquidity investment.

In a low-liquidity investment, it may take time to find a buyer and complete the sales process. Property is usually a low-liquidity investment. Shares in public companies generally have reasonable liquidity.

Some investments may be ‘illiquid’ – you can't get your money until a certain date or event (e.g. retirement).


Risk and reward is the classic investor's balancing act.

The higher the risk you take, the higher returns you could receive, but the more chance you have of your investments losing value, fluctuating in value, or failing entirely.

With a low-risk investment, you generally know the return you will receive right up front. A bank savings account is a low-risk investment. You know the return (the interest rate), but compared to riskier investments, like shares, the return isn't very high.

Higher returns are only available with higher risk. The risks come in two types:

  • Volatility: The possibility that the value of your investment will go up and down.
  • Performance: The possibility that the investment could fail and you lose all or part of your money – or the investment gives you a lower return than you expected or needed.

If you are considering high-risk investments, make sure you balance your risks with other investments in lower risk areas (like short-term deposits or cash and bonds).

You can generally recognise high-risk investments because the potential returns are also sky high. The promise of too-good-to-be-true returns is probably just that, not true.