If you’ve decided to put money in the stock market, you may have noticed that there seem to be people who are really good at investing, while others just don’t do too well. That is, some are making money on a consistent basis while others are experiencing quite the opposite — seeing their investment accounts shrink with each passing day.
When you first start investing, it can be both exhilarating but nerve-wracking at the same time, especially when you begin to see those market prices fluctuate. But as you gain experience, you’ll find that all this just comes with the territory, and you’ll be able to take it all in stride. Over time, you’ll build experience and confidence with investing that will hopefully serve you well even during volatile stock market hiccups; it’s quite important that once you decide to become an investor, that you stick to the investment plan that you’ve developed.
Now it’s also a good thing to know what it is exactly that makes a stock investor successful. Are these people born or made? I think it’s a bit of both, because there are people who come across as natural investors: perhaps they have a natural interest and ability to tackle the stock market. Mastering the markets calls upon a variety of attributes and characteristics; to be a good investor, you’d also need some level of knowledge and understanding of what’s going on.
The Attributes of the Successful Stock Investor
Here are some attributes that I believe each stock investor should possess in order to be good at what he or she does:
1. Patience
The stock market is not a place to get rich quickly. Sometimes, it’s a “three steps forward, two steps back” kind of environment. But over time, especially if you invest for the long term, you can expect to be rewarded with an average 8% to 10% per year in returns.
2. Enjoys Lifelong Learning
How many stories have you heard of people finding some success and turning on the autopilot? They are happy to ride on the coat tails of their past successes. How many of those same stories have ended in eventual failure? We must stay humble and continue learning. We must remember what got us there and continue that kind of work. Investing rules change by the day and sometimes by the hour. If you aren’t keeping up you will eventually lose.
3. Hard Working
Are you prepared to put in some hours developing your investment portfolio and maintaining it on a regular basis? Just like with anything else, hard work can help propel you toward improvement and success. If it takes you 40 or more hours to earn your modest salary now, why would anybody think that with just an hour or two a week they could make more than what they currently earn?
4. Discipline
Our success can often be attributed to our ability to function under a set of rules. Investing isn’t any different. If you decided to purchase mutual funds as a long term investment, don’t change your plan in a few short months and decide to impulsively sell out of those funds because of a market correction. If you’ve got a solid investment program, then it’s best to stick with it. Discipline is simply following the rules even when you don’t want to.
5. Organized
It helps when an investor is organized. When you own several investment accounts, and have built a diversified portfolio, having an organized approach to managing your finances and investments will allow you to stay on top of things.
So do you have what it takes to be a strong and solid investor? I believe anyone can pick up the skills needed to be successful at stock investing: to find success, one just needs the interest and dedication to apply to their investments.