Each of us has some characteristic behavior. In extreme situations, someone is calm, someone shows up his emotions and behaves like without any boarders. Similarly, it is in investing. Someone sells all the shares during the recession, someone is patient and still buys. These essential qualities characterize us. In investing, it is necessary to have the right ones and avoid the bad ones. I have a good message for you – characteristics or human traits can be changed if you want to. In this article, we will look at those that are common to successful investors such as Warren Buffett, Carl Icahn, Charlie Munger, George Soros, Ray Dalio and others.
Critical thinking and own opinion
Most investors are affected by media, newspapers, tips from analysts or friends. Successful investor has his own opinion, which reached by his own path – by analysing and evaluating the situation. He certainly does not follow the analysts’ recommendations, but he checks all the presented information whether they have a verifiable value and whether they are from a reliable source.
“To make money in the markets, you have to be an independent thinker who bets the consensus and is right.”
from the book Principles, Ray Dalio
2. Courage to take a risk
Whoever does not invest risks more than the one who invests. By not investing, your money stored under the mattress, in the safe or on the current account are being devaluated by inflation.
3. Control of your emotions
Fear and greed. Two emotions that move investors. The investor who controls them will achieve higher returns than an investor who acts impulsively and without analysis. Here you can help yourself and use the cost averaging tool to avoid the timing of the market, which for most investors carries a lower yield.
Investing is not a sprint, but a marathon. Over the night you definitely do not get rich. In addition, if you are a value investor, you have to wait until the market recognizes the internal value of the share or the investment. Investment opportunities do not come every day, not even every month or a year. Impatience leads to more frequent trading, which will increase transaction costs and reduce overall revenueWell-defined investment strategy
Well-defined investment strategy
The risk is that you do not know what you are doing. But if you know exactly what you are doing, you managed a big part of it already. Choose the investment approach that best suits your personality, that is the most important. At first it may change, but you should end up with one that fits right to you. Somebody goes through a passive way of copying indexes, someone chooses an active selection of shares and, for example value investing.
Learn from your mistakes
Mistakes are necessary for development. Personally, I love them, even if someone could punished for them in the past. With every mistake I learn new things, development and advancement are taking place. We can read about others’ mistakes, try to avoid them, but the best experience is personal.
Investing like a passion
Passion is energy. Where there is energy, the results are better. If you invest as a passion, it’s a big plus. For the most successful investors, making money was a passion, which was reflected at an early age.
We each have certain characteristics. Few people have all of them that are ideal for a successful investor. The good news is that everything is in your hands – you can get the new ones and old ones that ruin your performance overwrite like the data on your computer hard disk. Invest with reason, not with emotions.