Whatever your investing experience and whatever your skill level, it's important to be mindful of the characteristics that can help you succeed. Nobody's perfect, but by focusing on those areas for improvement and continually striving to do better and stay educated, you might find yourself approaching your investments in a more logical and measured way, which can help lead to success.
Here are 11 characteristics successful investors tend to have in common:
- Are you ready? . Have a strategy for entry and stick to it. It’s best to be fully prepared and have it before you do anything - know when you’ll buy and, more importantly, when you’ll sell. When the time comes to do either, stick to the plan.
- Education . Do you know what you’re investing in? Have you done the research, both on what it holds and how it fits into your portfolio? Do you know the tax consequences and the expenses? Have you researched the fundamentals on your position?
- Patience . Success does not happen overnight. It can take years of careful investing. Do you have it in you to wait awhile for results? Are you okay with not getting rich overnight? There are no get-rich-quick schemes in the markets that work over and over again.
- Risk . All investing carries with it a certain level of risk. Smart investors know their limits. Are you taking on a level of risk that you’re comfortable with?
- Loss . Traders are not always on a constant winning streak. There are going to be trades that simply never pan out. The questions you have to ask yourself is: Are you comfortable with the idea that you might lose a little? Or are you gripped with fear at the thought?
- Being able to let go . Eventually, all things come to an end. When the time comes, do you have an exit strategy? Will you be able to confidently say goodbye and either take the loss or use the cash you’ve gained toward something else?
- Master your emotions . We all have them, but they should play no role in your investing. Examine the reasons you’re buying or selling. Are you buying because you’re in an excited frenzy, or are you playing the markets with cool logic and waiting for signals?
- Plan Ahead . Looking back is nice, but past history is no guide for what might happen in the future. Are you looking ahead, always on the hunt for new opportunities? Or are you stuck in the past and waiting for it to come back?
- Self-control . When it comes time to buy or sell, you should have a plan and follow it. Wise investors don’t rationalize their way out of executing a trade if all the signals say that they should do so. Do you have the discipline?
- Think it through . Consider why a position looks appealing to you. Think about what you like, and why you like it, where it fits in your portfolio overall.
- Forgiveness . We’re all human, and we’re going to make mistakes. If you’ve made one, have it in you to dust yourself and move on. Flogging yourself over a bad trade is fruitless - use that energy to find new opportunities.
Links:
[1] http://www.etftrends.com/2008/07/an-etf-trend-following-plan-for-all-seasons.html
[2] http://www.etftrends.com/2009/05/how-trade-etfs.html
[3] http://www.etftrends.com/2009/02/10-ways-you-can-use-etfs.html
[4] http://www.etftrends.com/2008/10/lets-get-ready-rebound.html
[5] http://www.etftrends.com/2009/05/5-ways-overcome-investing-jitters-get-back-to-etfs.html
[6] http://www.etftrends.com/2009/04/why-bother-having-a-stop-loss-with-etfs.html
[7] http://www.etftrends.com/2009/06/5-ways-keep-your-emotions-out-etf-investing.html
[8] http://www.etftrends.com/2009/04/where-you-can-find-etf-opportunities-in-this-market.html
[9] http://www.etftrends.com/2009/06/having-confidence-buy-etf-rally.html
[10] http://www.etftrends.com/2009/06/how-objective-when-investing-etfs.html
[11] http://www.etftrends.com/2009/06/fearful-of-the-markets-and-etfs-6-things-you-can-do.html