Characteristics of Successful Investors

“The only question to ask yourself is, how much are you willing to sacrifice to achieve this success?” -Larry Flynt

Successful investors rely on simple and uncomplicated routines which help them keep track of their past, current, and potential financial situation. The maintaining of specific routines and habits are qualities of successful people not just investors. The ability to exhibit self control, and passion at all the same time is not something that all people can do. But the ability to combine both are found in the personalities of all successful individuals.

Characteristic #1 Keeping a Journal

Most successful investors have kept a journal. Buy yourself a cheap school notebook and keep a list of your all your trades. Then write down brief notes about what happened in the market, the result of the trade, and what your thoughts were about it. While this might not seem helpful in the present, it will in future. When a similar situation occurs or you are thinking about reinvesting, you can quickly leaf back to that particular trade and have all the information you need without having to redo research. It is through this daily journal that an investor can learn from past mistakes and write down their thoughts in the moment. Trading is equal parts research and what you feel in your gut. In hindsight, you can gather new wisdom and insight you may not have had in the moment.

Characteristic #2

Do not over analyze your stock investments. Especially for long term investments, daily monitoring is not just unnecessary it is a waste of time. Most successful investors examine their stock portfolios quarterly and at the most, every month. Watching your investments, daily, can lead to paranoia and fear over the normal ups and downs of the stock market. Investing is a long term activity and does not to be watched daily.

Characteristic #3

Determine how you define success. For someone people, success is going to mean being a millionaire, while others are going to view success as slowly making a profit from long term investments. Warren Buffett, one of the world’s greatest investors, has said that he believes success, for himself, is not losing money. Many financial professionals use yearly percentage of return as a way to measure success. An average 6% return on all stock investments is a good sign that you are doing well and profiting.

Successful investors understand that sometimes they will make a bad decision and they will lose money. In the end successful investors are those people who have made more money then they lost. Many investors and businesses actually build in ‘failure’ money to their budgets. Once you come to terms with not winning all the time, you will have less fear about investing. Less fear means you make decisions based on research not emotion.