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Last Updated: Feb 18th, 2008 - 14:39:01 |
Successful Investors – What They Have in Common
Obviously, the first thing that successful investors have in common is a good net profit. The question is, what common traits do they have that make them so successful?
First and foremost is method. Their methods may differ widely, but the presence of a methodical approach is true for all of them. All successful investors have their respective ways of organizing relevant investment information and take the right pragmatic decision at the right time, be it on investing or disinvesting – that is, withdrawing or selling off one's stock.
Everyone makes a profit on a few deals if they have been in the game for some time. The question is, how do some people make a profit so often? Simplistic advice like ‘keep left’ or ‘follow a witch or a pendulum’ does not really make sense. Nor is there any single fool-proof method regarding investment strategies. If you want to win you have to play, and make the right moves under the rules of the game. The first move is to get and keep track of stock and corporate information properly.
Focus and not emotionality is what successful people have when going into this business. Startups are normally small or moderate, and that is indeed a good thing because successful investors do not make large investments on anything they have not understood adequately. If you invest time to read and observe the market, your time will turn into money.
They analyze their own portfolios and also those of others results, at least in the beginning. They keep written track of the analysis results. Analyzing means figuring out causes and effects of the events intelligently. They are open to mistakes in purchasing and selling of stocks, in speculations on options, on the timings of buying and selling. They initially compare the going rates with some standard mutual fund stock info track such as S&P 500 index fund.
If an investors finds him continuously on the wrong side he should be mature enough to reconsider his approach. He can't stick to any particular stock because of emotional investments. A successful investor knows that the market ruthlessly ignores any emotional attachment.
It is common to find successful investors who pay attention to the immediate trail of prices of the stocks purchased, but still do not get swayed by 10% ups or downs. They have set pragmatic tolerance ranges for themselves. They are confident but not overly so. They will never play a sitting duck in risky affairs; though they will surely absorb a certain amount of risk. They are quick to distinguish between the 'no-risk-no-gain' and 'too-risky' lots, and it is often this acumen that makes them successful investors.
They often will move upstream along their documented analysis to reach proper understanding of the stocks they are considering. It is wise to understand one particular stock in every detail, and to use that knowledge to learn the other stocks better.
Work using your head. Remember, Lady Luck does not smile for a lazy bum. And if there's anything that all successful investors have in common, it's that not one of them is a lazy bum.
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