Investment Psychology Inventory Profile
This analysis is a helpful tool in determining your areas of strength, as well as areas of weakness as a trader.
It can help guide you towards the areas in which you most need to focus.
The Investment Psychology Inventory™ profile is a 176-item questionnaire designed by Dr. Tharp.
It takes about 15-20 minutes to complete.
Why Do the Inventory:
Over the past 20 years, Dr. Tharp has conducted extensive research on how stress affects human performance. This unique profile will evaluate your areas of strengths and weaknesses as an investor or trader. You can use the analysis and results from the profile to help guide you in your quest to improve your performance as an investor or trader.
Your results are kept in confidence and are never shared with anyone other than you.
The Investment Psychology Inventory Profile will rank your characteristics in three areas:
1– Psychological Characteristics
2– Decision Making Skills, and
3– Management and Discipline.
The profile scores will give you insight into specific questions such as:
- Does your personal life interfere with your trading success?
- Does your attitude support trading activity?
- Do you make decisions without worrying about what others are doing?
- Are you disciplined and patient in your approach to the markets?
These are only a few of the many areas analyzed in the profile.
What the Test Measures:
The test measures ten areas that Van Tharp has concluded are important for trading success.
1. A stress level scale – the more stressed you are, the less well you’ll probably perform as an investor/trader.
2. A scale that measures how positive you are. Since you tend to get what you think about, positive people will do better as traders
3. A scale that measures personal responsibility. If you accept responsibility for what happens, then you can always fix mistakes. If you blame others, then you do nothing except feel bad and repeat your mistakes over and over again
4. A scale that measures whether or not you are motivated to make money. It’s almost an inverse scale because the best traders/investors are not motivated by money, they’re motivated by the drive to be the best or by the joy of trading or by the desire to work on themselves.
5. A scale that measures conflict. If you are not motivated to make money, then look for possible conflict, and if this scale is high, then conflict is probably there.
6. Next, there is a scale that measures judgmental heuristics. People have lots of biases in which they tend to use shortcuts to make decisions. These can render them inefficient, and this scale measures that tendency.
7. The next scale measures conformity. Conformist tends to follow the crowd and do what everyone else does. Conformist tend to have less success in the markets.
8. There is also a scale that measures intuition. This scale is fairly neutral. Being intuitive is not necessarily correlated with success or failure. Its just good to know where you fall on that scale.
9. The next scale tends to measure how organized (and disciplined) you are. It also measures, to a minor extent, how likely you are to use good position sizing.
10. The final scale measures the tendency to be a gambler and trade just for the fun and excitement. Good trading tends to be quite boring, so those who are in it for fun tend to have a tough time.
It's a Tool:
The Investment Psychology Inventory is simply a tool. It gives you a snapshot of where you are right now in regard to your beliefs and knowledge, in the context of trading. Taking the assessment helps you to discover your strengths and expose your "blind spots."
Many times, the test results will point students to certain sections of Peak Performance Home Study that they should concentrate on because the test reveals different qualities about the person. These areas are better worked on outside of the stock market. If a person were to work through these issues within their trading habits, they could end up being quite costly!
Every trader is different and has different goals. So, depending on their trading style, some areas may matter less because their trading style isn't as dependent on that area. Another trader may have certain preferences but is missing a key component that is crucial to their success, given their trading style. Even if a trader has perceived themselves to be deficient in one way or another, as measured by their composite or overall scores, or in any given area addressed by the test, it simply means that they have a bit more work ahead of them to reach their goals.
Options & Discounts:
This is a much more in-depth analysis than Dr. Tharp's Tharp Trader Test which has 35 questions. The Investment Psychology Inventory Profile includes 176 questions. The results from the Profile work best when used in conjunction with the material from the Peak Performance Home Study Course.
The cost of the Profile is discounted when purchased in conjunction with the Peak Performance Home Study Course.