- 1 8 HABITS OF ACCOMPLISHED INVESTOR
- 1.1 The last Point is our Favorite because it should be the last point to end with. Most people including me have started that as the first point. At least now don’t start reading from the last Point.
- 1.2 Patience
- 1.3 Emotional Intelligence
- 1.4 Persistence
- 1.5 Risk Management
- 1.6 Money Management
- 1.7 Disciplined
- 1.8 Learn from Mistakes
- 1.9 System
- 1.10 LUCK
8 HABITS OF ACCOMPLISHED INVESTOR
The last Point is our Favorite because it should be the last point to end with. Most people including me have started that as the first point. At least now don’t start reading from the last Point.
Accomplished Investor are very patient. After investing they do not follow the price but valuations. Their assumptions on which they have entered the stock are continuously monitored. They do not invest for days and weeks and their investment is not meant for a quarter to quarter. Serious investing is as boring as watching your paint dry.
“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”
– Paul Samuelson
What drives market, only two things are prominent which is Greed & Fear. Emotional Intelligence is very easy to understand. Neither Greed nor Fear should drive your choice. Stronger and accomplished investor is driven by facts and they do not allow the greed and fear to overpower their decision-making skills.
The easier it looks the tougher it becomes to implement it. Majority of investors are
“Know what you own, and know why you own it.”
– Peter Lynch
Persistence the fact of continuing in an opinion or course of action in spite of difficulty or opposition. The movement stock starts making a loss and most investors lose their convictions. Those who inclined towards fundamentals and monitor macro details would not change their decision with change is market opinion.
“In the short run, the market is a voting machine but in the long run it is a weighing machine”
In a stock market where there is the prediction, there is no consistency in return. At any point in time, there should be no loss of entire capital. If you lose entire capital you would be out of the market. Most of the professional trader follow the risk to reward ratio of 1:2 and 1:3. Many professional investor and traders do risk management by hedging the entire portfolio.
“Wide diversification is only required when investors do not understand what they are doing.”
– Warren Buffett
“Risk comes from not knowing what you are doing.” –
– Warren Buffett
Money management is following expenses, taxes, budgeting, and investment. Knowing where you are spending your money and a well-thought out plan.
“The philosophy of the rich and the poor is this: the rich invest their money and spend what is left.
The poor spend their money and invest what is left.”
– Rich Dad
People those who have been investing in a very systematic over a long period of time have generated outstanding returns in the stock market. Historically it has been witnessed that both in bear and bull markets panics moments have been inevitable. And these panics moments leads to wrong decision and discipline goes out of order at the cost of fear and greed.
Learn from Mistakes
Learning from mistakes is always assumed from its own mistakes. Which is a very expensive affair. Learning from others mistakes is always beneficial.
Successful investors and traders and investors are not afraid of miscalculations and mistakes. A professional investor is prepared to take continuous ten losses in a row. That is what differentiates them from the rest. Most professional investors are prepared to tackle mistakes with the help of hedging.
There are myriads of systems in the market which includes paid and free. There are other systematic screeners with innumerable permutations and combinations and the list is endless. Contemporary investing strategy, with ease of information available, also replicate professional investors portfolio.
Selection of system is not important rather sticking to the same system is the most important. After selecting a particular system when one gets exceptional returns they lose their discipline and invest more amount of money. At the same time when people lose on a particular system, they discard a system and change the system.
This is the Ninth one!
A bonus too.
Now when someone follows the above eight points luck comes to them as a bonus too.
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