ELI5: Explain Like I'm 5

Investor profile

An investor profile is like a menu for grown-ups. Just like when you go to a restaurant and you have to tell the chef what you like and don't like to eat, when you want to invest your money, you have to tell the investor people what kind of investments you like and don't like.

You see, when you invest your money, it's like you're buying little pieces of different things like companies, or properties, or stocks. But not all of these things are the same. Just like you might like pizza more than broccoli, there are some investments that are riskier than others. That means, there's a chance you might lose some of your money if you invest in them. So, you have to think about how much risk you're willing to take.

The investor people will ask you some questions, like how old you are, how much money you have, and how long you want to keep your money invested. They want to know these things because they can help you choose investments that are good for you.

For example, if you're still a little kid, you might not want to invest in risky things because you won't have enough time to make your money back if you lose it. But if you're a grown-up, and you have more money, you might be willing to take more risks because you can afford to lose some of it.

Once you tell the investor people what kind of investments you like and how much risk you're willing to take, they can make a menu of different things for you to choose from. But remember, just like with pizza, you have to be careful not to eat too much. That means, you shouldn't put all of your money in one investment. You should spread it out so that if one investment doesn't do well, you don't lose all of your money.