These Are Some Habits of Very Successful Investors Have in Common! You Too Can Become Successful in Your Investing Journey by Developing and Maintaining These Habits
Everyone now know that investing is a sure pathway to achieving financial security. Hence, most people, if not all, make efforts to invest. But making success out of investing is not easy. As a matter of fact, many have burnt their fingers in their attempt to make money investing.
Why is this so?
It’s because not everyone understands that investing requires the cultivation of a set of discplined behaviour. Every person who have achieve a level of success in investing have been able to identify and internalize certain attributes: The habits necessary to succeed in investing.
In the same measure, if you desire to succeed as a beginner investor, it is in your best interest to identify these habits. And internalize them. Know what successful investor do to be successful and copy them.
In this post, we shall be discussing the habits of successful investors.
Successful investors are commited to continous learning. Continous learning is important to them because it helps them be on top of the game at all times. Financial markets keep evolving. Developments in the economy affect prices of assets. To succeed, the need for you to stay up to date on market trends, economic news and emerging opportunities cannot be overemphasized.
Every successful investor you see read books, follow the financial pages, attend seminars and even take courses online and offline to continously enhance their knowledge.
The hallmark of successful investing is goal setting. From the onset set clear goals. These goals will help you to define your strategy and risk tolerance. Your must be specific, measurable, achievable, reliable and time bound.
A clear goal is one that take cognisance of your financial objectives as well as risk tolerance. You may be investing to accumulate long term wealth, retire gainfully or just to live fulfilling life. Making your goalwors clear and specific will help you make strategic investment decisions at all times.
The very first step to investing profitably is to have a plan. Planning is about deciding what you want to achieve with your investing efforts and fashioning out strategies for getting there. An investment plan should take cognizance of your life goals.
Diversification is an investment strategy that helps you reduce risks and possibly make more profits. Successful investors usually create a diversified portfolio. Portfolio diversification entails spreading your investment accross different asset classes. In other words, rather than put all your investment capital in one asset such as stocks, spread it accross stocks, bonds, real estates, etc.
Savvy investors use the strategy of diversification to manage losses and remain profitable particulalry in a market downturn.
To be successful in your investing journey, you need patience. A load of it. Patience will help you wait out volatile market conditions and moderate your thirst for short term gains. In the long run market will always reward the patient investor.
Managing risksAMP is an important element in investors. Effective and successful investors pay attention to risks and have strategies for managing it. Understand that different asset classes have different risks associated with them. Your risk tolerance level will determine what you invest in and how you invest.
A good risk management strategy will shield you from being emotional and help you survive in turbulent times.
Conducting thorough research or what you may call due diligence is important in investing. Without a thorough due diligence on an investment opportunity will mean you will be investing blindly.
Never invest blindly.
Your research may involve analzing the investment fundamentally and technically. Fundamental analysis will require you examine company financial statements, review industry trends and market sentiments. Reviewing and understanding economic indicators and their impact on asset classes is also essential part of fundamental analysis.
If you want to succeed in investing, one habit you must develop is discipline. Discipline transcends the capacity to control your emotions. Avoid emotional investing by sticking to your plan and strategy. Discipline will help you avoid making impulsive decisions, manage the emotion of fear and greed.
Developing a long term perspective will help you achieve success. The markets usually reward investors with long term perspective. Long term investing also benefits from the power of compounding.
It is a sound investment management to regularly review your investment portfolio. As you review your portfolio, there may be need to to rebalance it. This is will entail selling off non-performing assets and buying up others with greater potential. Sometimes it may help to engage a professional investment advisor to review and reconstruct your portfolio for optimal performance.
Everyone who has succeeded in investing at some point in his/her journey sought the help of profesional advisors. A professional advisorAMP may be a lawyer, an accountant or a financial planner; investment advisor.
The roles of professional advisors are diverse and may include guiding you through asset selection, portfolio construction, etc. The professional advisor will look at your circumstances, goals and risk tolerance, in constructing or recommending investment strategies.
However, it is important that you choose an advisor that is qualified, certified and posses requisite knowledge and/or experience in the investment class of interest.
Final Words
Here you have it. 10 Effective Habits of Successful Investors. Take time to study every person that has made a success out of investing, you will find that he possesses all of these habits in some measure. Developing and internalising these habits will help you navigate the complex waters of investing with confidence.
Buchi creates content and leads the Team at Kobotalk Management Services; a business development and investment consultancy firm. He provides strategic advisory to help SME's, small business owners and HNI's grow profitable business and make informed investing decisions.
Buchi creates content and leads the Team at Kobotalk Management Services; a business development and investment consultancy firm. He provides strategic advisory to help SME's, small business owners and HNI's grow profitable business and make informed investing decisions.