7 traits of an astute investor
Have you got what it takes to be a quality investor? Have all those decisions gone wrong because you're missing the one key character trait that could have made you millions?
This article goes on to talk not only about the personal characteristics of money managers but also lists another 8 approaches that quality investors take. How would you compare against these?
I've revamped their list with my own lean on some ideas.
- You need to understand business. If you're investing in stocks and shares and you don't understand the effect that management has over the value of the company - keep your money in the bank! Business-minded people understand the effectiveness of other business managers because they know and understand the pressures of running a business. They understand that things can be overlooked when they should be dealt with.
- You need to have an intellectual mind. We're not talking Einstein here but savvy enough to comprehend trends, figures, ratios and financial data and to interpret them in a way that allows you to compare apples with apples.
- You need to be humble - yet confident. An investor without a sense of fear and trepidation is a dangerous investor. Yet, an investor who gives more weight to his fears than his gut feelings when all checks out well is a foolish investor.
- You need to be able to stand out from the crowd If the crowd was always right then we would all make the same average investments. In order to progress an investor needs to find stocks that others have ignored.
- You need to be patient. "If only I could have patience - NOW!" Most overnight successes take years to mature.
- You need to be objective not emotional. It's easy to get swept up with the extremes. When things are booming we think we can't fail. When things are failing we struggle to see how we'll succeed. Set yourself goals and work towards them not how it's all feeling at the time.
- You need to love what you do. Anything completed out of obligation is a strain on your life. Your enjoyment of investing will shrivel quicker than an apple core on a desert highway if you lose interest in what you're doing or you're investing purely to make money.
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