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5 Habits of Highly Successful Investors

5 Habits of Highly Successful Investors

Have you seen how a few individuals appear to ascend to the highest point of their field or wonder why some investors like Warren Buffett turn into billionaires while others consistently achieve the same “average” results?

Investors turn out to be enormous not just through splendid purchasing decisions or on account of a sizable retirement fund or through some financing companies. They also have great propensities that are profoundly instilled into their framework.

It’s not a fortuitous event that certain investors discover the triumph while others never achieve their goals.

There are sure attributes that without a doubt set investors like Mr. Buffett separated from the average investors… they essentially do things another way.

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To venture into the shoes of a fruitful and successful investor, you should first start to think and act like them. This implies understanding their habits and applying them to your own particular approach.

Here are seven habits of highly successful investors.

1. They do research

There are abandon of studies, observation, and analysis available everywhere, including TV, internet, Wall Street Journal about investment.  Before investing in a company, use the product, study the business. The better you understand the business, the more confident you’ll feel about your investment.

Successful investors have the accurate reason behind every stock buying or selling decision and it’s not because they heard a TV analyst pushing the stock as a buy.

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In order to reach your investing goals, you must take the same approach with your own portfolio.

2. They understand the business

There are tons of organizations to invest in and lots of them might have the potential to be a good investment option, but that doesn’t essentially mean you should invest.

Why would you like to invest in a technology company if you don’t know anything about tech?  Do you understand how to evaluate the next mobile app or the technology trends that will impact the business investment? Stick to what you know well.

If you’re detached with the business and their products, and the industry in which they operate; it will be harder for you to make smart investing decisions.  Successful investors always invest in what they know and focus their investing efforts within their circle of competence. For example; Warren Buffett doesn’t invest in technology stocks, because it’s simply not where his competence lies.

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3. They have a diversification strategy

Diversification is important. You cannot be a successful investor if you’re putting money in just two or three companies. To be a successful investor always determine how much you want to allocate to each class and then diversify your investments to reduce risk and increase your odds of success. Successful investors are best at diversifying their ideally distribute risk. Keep in mind, the foundation for making fruitful investing decisions is knowledge and analysis of the business and the industry. The more knowledge you have, the better decisions you will able to make. Every successful investor has a well-defined investing strategy and they stick to this strategy. While some successful investors like Warren Buffett prefer the portfolio focus strategy.

As Warren Buffett said “Diversification is a protection against ignorance. It makes very little sense to those who know what they are doing.”

4. They think long-term

Terrible decisions sometimes are taken when we become emotional and involve in short-term thinking. When it comes to investment –be patient—Think long-term. It means having the patient for months and years, not just for some hours, days and weeks. All the successful investors are very patient to see the triumph. When they make an investment after doing their calculations on a business, they are ready to wait to make sure their plan materializes.

5. They learn quickly from their mistakes

When an investor discusses experience, they are basically discussing the trials confronted, botches made, lessons learned and triumphs accomplished.  One can never become a successful investor without making some erroneous conclusions, miscalculations, or mistakes.
Successful commit errors yet they are not disheartened by these missteps because they know mistakes are part of the process to becoming a better investor.

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When we invest in the stock market, we may feel helpless – like outcomes are totally out of our control. But that is not essentially the case. By making wide-ranging smart decisions based on the habits and characteristics mentioned above, we can add discipline to our investment decisions and avoid financial catastrophe.

Featured photo credit: Ma_Co2013 via flickr.com

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Tayyab Babar

Tayyab is a PR/Marketing consultant. He writes about work, productivity and tech tips at Lifehack.

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Last Updated on January 21, 2020

How to Develop a Millionaire Mindset in 6 Simple Steps

How to Develop a Millionaire Mindset in 6 Simple Steps

We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

How do you go about developing that millionaire mindset? By following these simple steps:

1. Focus On What You Want – And Take It!

So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

Millionaires play to win, not to avoid defeat.

This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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2. Become Goal-Orientated

It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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If you are to become a millionaire, you need to start accumulating money.

Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

3. Don’t Spend Your Money – Invest It

The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

Stop working for your money and make your money work for you.

Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

There’s not just the stock market — there’s also property, and your own education.

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4. Never Stop Learning

The best thing you can invest in is yourself.

Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

Learn everything you can about how economics works, how the stocks markets work, how they trend.

Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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5. Think Big

While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

Aim for the stars, if you fail you’ll still be over the moon.

6. Enjoy the Attention

To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

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Featured photo credit: Austin Distel via unsplash.com

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