In this article you’ll learn the best habits of highly successful investors. I will present 7 essential ones for you. It is this unique habit that separates successful investors from unsuccessful ones. The wonderful thing about these 7 habits is that they can all be learned by you. It’s not the actions taken that make the biggest difference to the information that comes to light.
If you learn to model yourself and your actions based on the habits of highly successful people, you’ll 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 in Yourself
The best way to make sure that you pay the lowest commissions and that nobody steals from you is to make all your investments yourself.
Even an honest broker will take 3% from your account every year and who is to say they’re competent or smart enough to make all the best moves with your money? No one will care about your money more than you, that’s a fact. So rather than trusting, rather than paying a percentage, make all the investments yourself. Keep that 3% commission in your account. There are many tools available to make it easier to handle your own investments.
2. Create trade rules that you do not change.
Set rules resulting from your studies, your desires, and your goals. It is important that your rules are set before placing a trade. Emotions will cause your investments to become more of a gamble and like gambling, you’ll ultimately lose it all. Rules will keep you from falling in love with a bad investment that goes bad.
For example: You bought a $10 stock, you believed it would be $20, but instead it languishes at $8. Your rule for investing is sell when you double or lose 10%. You’ve held on to your investment for too long because you love it and believe it will ultimately reach $20. Maybe but now it is a dog and you’ve got lost money, following the rules will save you a couple of dollars but emotions cost you. Following your rules, you would sell for $9 and move that money elsewhere.
Create your rules that take into consideration that you have emotions. Protect yourself using logically generated rules based on your goal needs and risk tolerance.
3. Living Rich Isn’t All About Money
Money is a tool to an end. Don’t let investments consume your life. If you missed a date, or a night out with friends, you may be spending too much time on your bank account.
Remember, not all investment ideas come from reading financial pages. I’ve made lots of profitable investments making investments based on a product I’ve seen in a store or something a friend said or learned something new randomly. I have found that sometimes it is nice to relax and let the world come to you.
4. Don’t Invest in Anything You Don’t Understand
If you use your own research to find investments, you’ll barely lose your shirt. The quickest way to lose the most money is to depend on other people’s advice. If anyone has ever told you that investing is not to be missed, RUN. Can’t miss none. GM goes insolvent, Sears goes insolvent, going broke means death. It misses.
5. Be Prepared to Lose Sometimes
It goes back to that rule. Every successful investor has a few outfits but they keep on trying and they get rich on a few others. Highly successful investors all the time have a certain percentage of their portfolio dedicated to finding gems in distress. Set a percentage that you’ll use for riskier investments. Be it 5% or up to 20% finding the next Amazon can earn you lots of money. Keep the rest of your portfolio steady growing and you will still get about that 8% regular growth.
6. Never Stop Researching
Highly successful investors set aside at least an hour a day to read the news, not only investment news but also daily news. Successful investing is eventually about putting your money in a company before it starts to be profitable, and before anyone else finds out.
If you read the news and listen to a few bill that’s going to pass that will legalize drugs, or the military is buying a new vehicle and you make an investment before EVERYONE finds out then your investment will increase as the money comes in. when everybody gets in on the action. But you are already there.
7. Specializing in a Sector
These habits of highly successful investors go against the grain, but then we speak about what sets highly successful investors other than everybody else. Specialize, do not diversify. Study the market sector and study it well. No one can know every sector but you can know a certain sector like the back of your hand and this will make you an expert, and this as mentioned in the previous rule will put your money ahead of others. Specialize.
The best chance of becoming a really successful investor is in the habit of doing the same thing steadily. Investing is not gambling, gamblers all the time lose but investors can win with a set of investing rules and daily habits built around those rules. Investing is for the future, investors play 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 on the habits of highly successful investors. I actually hope that its content has been of good help to you.