In this article you will learn the best habits of high successful investors. I will present the important 7 to you. These unique habits are what set the successful from the unsuccessful investors. The great thing about these 7 habits is that they can all be learned by you. It is not the action taken that makes the biggest difference by the information that is uncovered.
If you learn to model yourself and your actions based on the habits of the highly successful you will find yourself growing in confidence and knowledge. This growth will manifest itself in dollars when implemented over time.
7 Best Habits Of Highly Successful Investors:
1. Learn How to Invest for Yourself
The best way to make sure that you’re paying the lowest commissions and that no one is stealing from you is to do all your investing yourself.
Even an honest broker will be taking 3% of your account on an annual basis and who’s to say they are competent enough or bright enough to make all the best moves with your money? No one will ever care about your money more than you, that is a fact. So, instead of trusting, instead of paying a percentage, do all your investing yourself. Keep that 3% commission in your account. There are plenty of tools available to make handling your own investments easy.
2. Create buy and sell rules that you do not alter.
Set up rules that result from your study, your wishes and your goals. It is important that your rules are establish prior to making your trades. Emotion will cause your investing to become little more than gambling and like gambling, you will eventually lose it all. Rules will keep you from falling in love with a bad investment that has gone bad.
For example: You buy a $10 share, you’re sure it’s going to $20, but instead it’s languishing at $8. Your rule for investments is sell when it doubles or loses 10%. You’ve held on to the investment already too long because you love it and are sure it’ll eventually go to $20. It might but right now it’s a dog and you’ve already lost money, following your rule would have saved you some dollars but emotion cost you. Following your rules you would have sold at $9 and moved that money to something else.
Create your rules that take into account that you have emotions. Protect yourself using rules that logically established base on your needs goals and risk tolerance.
3. A Rich Life is not All About Cash
Money is a means to an end. Don’t let investing consume your life. If your missing out on a date, or an evening with friends you’re probably spending too much time with your bank account.
Remember, investment idea don’t all come from reading the financial page. I’ve made many lucrative investments by making an investment based on a product I’ve seen in the stores or something a friend said or learning something new in a random fashion. I’ve found sometimes it’s good just to relax and let the world come to you.
4. Don’t Invest in Anything You Don’t Understand
If you’re using your own research to find investments you’ll seldom lose your shirt. The quickest way to lose the most money is to rely on the advice of others. If anyone ever tells you an investment is a can’t miss, RUN. Can’t miss does not exist. GM went bankrupt, Sears went bankrupt, bankrupt means it died. It missed.
5. Be Prepared to Lose Sometimes
This goes back to those rules. Every successful investor has had some duds but they keep trying and they strike it rich on some others. Highly successful investors always have a certain percentage of their portfolio dedicated to finding the gems in the rough. Establish the percentage you’ll use on more risky investments. Be it 5% or up to 20% finding the next Amazon can make you a fortune. Keep the rest of your portfolio in steady growth and you’ll still get that regular 8% or so growth.
6. Never Stop Researching
High successful investors set aside at least an hour a day to reading the news, not just the investment news but also the daily news. Ultimately successful investing is about putting your money in a corporation before it starts becoming profitable, and before anyone else knows about it.
If your reading the news and hear about a law about to take effect that will legalize a drug, or the military is buying a new vehicle and you make your investment prior to EVERYONE knowing then you investment will be there to rise as the money washes in as everyone else gets in on the action. But you were already there.
7. Specialize on a Sector
This habit of highly successful investors goes against the grain but then we are talking about what separates the highly successful from everyone else. Specialize, do not diversify. Learn a sector of the market and learn it well. No one can know every sector but you can know a particular sector like the back of your hand and this will make you an expert, and this as mentioned in the previous rule will get your money in place ahead of everyone else. Specialize.
The best chance of being a highly successful investor is to be habitual do the same things steadily. Investing is not gambling, gamblers always lose but an investor can win with a set of investment rules in place and daily habits which are built around those rules. Investing is for the future, an investor is playing the long game, a successful long game requires the habits of a successful investor.
I want to thank you for taking the time to read my article about habits of highly successful investors. I sincerely hope its contents have been a good help to you.