Successful Investors Clarity. Planning. Understanding. Saving. Researching. Cost-effectiveness. Experience. Diversification. Investing. And patience. 

Introduction

So, what do they have in common? Quite several things. But all those things can be pared down to just the following 10:

Clarity

The first common feature they all have clarity. They know exactly what they want: the financial goals and objectives they want to achieve. Therefore, if you want to be one of them, you must also be clear about your investment goals. 

Plan

Successful investors plan. They do not leave anything to chance. Armed with clarity, they itemize their goals and develop a definite strategy that they can use to achieve them. Every successful investor invests with a plan!

Understanding

Peter Lynch, the legendary investor, advises, “Know what you own and know why you own it.” It is not a coincidence that arguably they all have this habit in them. They put their money only on businesses they understand, preferably those within their circle of familiarity.

Saving

NOT surprisingly, they are supersavers. The idea of millionaires is different from that of movies and social media projects. Most millionaire investors are supersavers who live far below their means.

Research

If you need a flair for investment research, you had better develop it now. To succeed as an investor, researching is a highly effective habit that you have to adopt. Successful investors research the stocks they want to buy to make informed decisions about them.

Cost-Effectiveness

As earlier hinted, successful investors are also highly cost-effective. They are savvy enough to realize how easily transaction costs and tax payments can erode most of the gains on their investments. So, they keep their eyes on them.

Experience

Successful investors have this interesting habit of seeking experience. Every investor miscalculates and makes erroneous conclusions about stocks at one time or the other. However, those who learn from their mistakes eventually succeed; those who do not repeat them fail.

Diversification

“Do not put all your eggs in our basket” is a timeless principle that successful investors have in common at every age and clime. That is, successful investors diversify. For example, they buy different companies across different sectors. Many also diversify into other investment vehicles, such as real estate.

Investing

You might be surprised how “investing” can be one of the effective habits of successful investors. Isn’t that tautological? Well, it is not. Why? Because successful investors invest. They do not speculate. They do not bet. Instead, they just put their money in the stock market or any other time-tested investment vehicle for the long haul without minding the intermittent noises around them. That is how they succeed.

Patience

The previous point brings us to this final point. It is impossible to be a successful investor without patience. Everyone wants to convert a few bucks into millions within a short time. Successful investors are different from that. They are usually patient folks who hold onto their investments for years and avoid get-rich-quick schemes.