Want to Be a Good Investor? It Helps to Have These 7 Traits
What makes a good investor? Is it how much money they start with, their return on investment or how diversified they are? If you study the great investors of our time, you’ll find that while their backgrounds and investment vehicles are different, they have a few similar character traits that aided in their success.
You don’t have to be born with the character traits of good investors to be like them — just ask any mom with a toddler if her child is inherently patient. These traits can be developed over time if you’re persistent about keeping your eye on the prize.
The most important thing is to start investing. The sooner you start, the more time you have for your money to grow and the less you’ll have to put in. Even if you start small with investing, your future self will thank you for not waiting.
The 7 Traits of
Highly Effective Great Investors
So whether you’re buying rental property or investing dividends, make sure you’re always working to develop these seven personality traits of good investors, and you improve your chances of winning in the long term.
They don’t go back-and-forth in an up-and-down market. They wait for the right moment to go in and the right moment to come out. They don’t get nervous with every dip or overzealous when there’s surge. They don’t get caught up in the newest trading craze. They opt for time-tested approaches, even if they take longer to pan out.
While everyone else lets the media overinflate their feelings about the market, good investors control their emotions. They’re committed to the path they’ve chosen, and they don’t let fear or greed affect their strategy.
They don’t just plan which investment to make next. Good investors plan for the probable and the improbable. They know that even the best-made plans can go south, so they always have an exit strategy. And they’re at the front of the passive income movement because it means not having all their eggs in one basket.
Good investors may have a diversified portfolio, but it’s focused on their “one thing.” Whether it’s stocks, businesses or real estate, they focus on what they know and what they enjoy, and keep learning about it. It’s this mindset that separates average investors from great ones.
In a market that’s unpredictable, they’re willing to take risks. They thrive on calculated risk, knowing there’s a chance to lose but an even greater chance of coming out ahead.
They’re lifelong learners. By always studying what they’re invested in and reading about, successful investors are able to make better and wiser decisions. And when they do make mistakes, they’re quick to learn from them. They’re also open-minded. They don’t hold onto old methods out of tradition. They’re innovative and always evolving.
- Team Players
They keep company with people better than themselves. Average investors try to save by DIY-ing on their own, but good investors don’t go it alone. They have a team behind them filled with friends, family, staff and consultants. This mastermind group helps them try new things and persist in the old.
A lot of character traits of good investors overlap. When you get better at one, you inherently improve another.
Don’t stress about becoming the perfect investor. Keep working on these personality traits, and you’ll see a difference in the way you invest and how you think about investing.
Jen Smith is a contributor to The Penny Hoarder, one of the largest personal finance websites with more than 19 million monthly readers. In 2017, the Inc. 5000 ranked The Penny Hoarder the 25th fastest-growing private company and the No. 1 fastest-growing private media company in the United States.