How do you feel about investing your money? Does it make you a little nervous? Elated? Fascinated? Some or all of the above? Before you decide to invest, understand your connection to money. Once you get clear about your feelings, then you can answer the question "what kind of investor are you?".

So when it comes to money, who are you? That's not just a philosophical question. You have a certain relationship with money, born out of how you feel:

You can have all the information there is about investments, you can have the best financial professional, you can have a stack of investment magazines, but how you feel about money and what you believe about money, will govern how you invest it.

There are a few general categories of types of investors. No one type is better than another, they’re just different, and they will define the general direction you go in with regard to how you invest your money.

An aggressive portfolio concentrates on equity investments (such as stocks or stock mutual funds) that aim for strong growth. It is most appropriate for investors with a timeline of 15 or more years who have a high threshold for risk and want to see their money potentially grow quickly. The aggressive investor knows they have the potential for big rewards and equally high potential for losses.

The moderate portfolio concentrates on an investment mix that is a little more “balanced” and may provide for some income now and aims for growth in the future. It is most appropriate for investors with a timeline of more than 5 years who can accept moderate risk and are willing to settle for potentially more moderate returns.

A conservative portfolio tilts away from equity investments toward those which seek to produce income or protect the stability of the principal invested. It is most appropriate for investors with a timeline of less than 5 years who need investment income now, have a low threshold for risk, and are willing to accept relatively low returns.

Sometimes it makes sense to be a chicken. If you have very little time to put the money into an investment, say you have college tuition due soon or money needs to be put down on your new house in a few months, then you don't have the time to ride out the trends of the stock market. If there's a bad turn, you don't have time to ride out the wave.

Look to see if possible short-term losses would jeopardize your long-term goals. (See discussion about goals). Again, if you have the wherewithal to weather the short storm for possible gain in the long term, then it might be worth it. But if you have a small sum of money that you know you can't risk because it's all you've got, putting it all on the long shot on the nose in the fifth at Belmont is not how to be a smart investor. Get in touch with your inner chicken and keep that small pot safe. As the gamblers wisdom goes, only play with what you can afford to lose.

It’s important to stay true to who you are as an investor, but you also need to understand that each investor type comes with certain limitations. If you’re very conservative, that’s fine, but you have to understand that your money will grow more slowly.