What skills and traits make a good investor?
Hi, so you’d like to find out about how you can become a more well equipped investor.
I’d like to clear something first, you do not need to be a genius mathematician or even remotely good at math to be a good investor. The more simple your approach is to investing, the more success you will have in the long run. Do not try to outsmart the market as this is not how you win in the game of investing. You learn to turn the markets tide into your favor for a longer duration than it is against you.
The skills that good investors have ranges from personality traits to skills they have learnt over time. Let’s start with traits: a good investor is patient and even more so during times of market down turn. You need to be able to hold onto your asset for at least 20 years or you have not even given it time to grow. A mindset trait is to understand that the stock market typically crushes traders and gives to the long term investor. I’d strong suggest you don’t buy stocks unless you have the temperament to hold for years.
For more traits check out: https://www.thebalance.com/investor-personality-traits-3867158
Another personality trait would be to have high self esteem in choosing stocks, you must be able to purchase an asset whether you are agreed with or disagreed with. You shouldn’t be purchasing based on other people’s values or even buying with others. The best investors are ruthlessly stubborn in sticking to their own proven philosophies when purchasing an asset. I’d suggest you don’t buy unless you can be stubborn enough to hold the stock and brave enough to buy the ones that look “bad”.
The ability to not buy a stock quickly is also valuable, by quickly I mean irrationally. You should be able to read 500-1000 annual reports before even having found 1-10 potential investments. You must have the ability to hold off from investing quickly, remember it is not the timing of the investment which matters, it is simply the quality of the investment and the value that the investment offers at the time. Don’t fool yourself by thinking you can find strong investments in a matter of days or weeks, this may occur as a rare case but for the most part it is not. You need to be able to have discipline in the selection process and this is a trait many investors lack.
To be able to buy based on pure logic and not emotion is another rare trait in investing. To beat the market you have to find assets based on logic and be able to hold assets through times of downturn by having the stomach for handling poor times. You don’t have to be smarter than the other 160-180 IQ investors, in fact it may be true that the 80-100 IQ investors perform better on average. Excess thought leads to emotional decision making and this is common with higher IQ individuals.
To conclude you don’t need to be smart to win at the game of investing, you do need the right mindset and emotional temperament. Most of the best investors are the ones who realise this and regularly apply it. The ability to focus in the stock selection process is the biggest key to your investing success, you need to be able to go through 100’s of options to find the hidden gems that no one talks about. You have it in you to be a god tier investor, it is simple yet less than 1% will apply these lessons.
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A Must, free cash flow education by Robert Kiyosaki:
Thank you for reading, for more education:
Have a fantastic day.
Regards,
Jagdip
