4 Habits of the Successful Investor

If you want to become a successful investor, you really need to know the right habits that will help you attain your investment goals. Believe it or not, ensuring big returns on investments requires more than just your knowledge in finance, economics, and the kind of market you are involved in. So, here are some of the most important habits proven to help you reach the top and gain more profits regardless of the type of investment you make.

1. Track All Your Investments

Top investors always know the score when it comes to their investments, while ordinary investors tend to play favorites when evaluating their portfolios. If you want to succeed, you really need to know what is going on in each of your investments. Always look at the big picture. If four out of your five investments have appreciated in value in the past two quarters, you cannot say that you have been a successful investor, especially if the losses in your one losing investment account are big enough to pull your entire portfolio down to red or overall loss.

2. A Successful Investor Uses a Diary

Using a diary may not be the preferred way to keep track of one’s investment accounts nowadays, particularly in a time and age where smartphones and palm top computers are the norm. However, having a traditional spiral notebook diary right next to you is advantageous in two ways. One, it allows you to quickly put down your thoughts while you make investment decisions. Two, it allows you to review your decisions and learn from mistakes made in the past. With a notebook diary, you can easily access information without having to worry about batteries or an Internet connection.

3. Specify a Timeframe When Evaluating Investments

As mentioned, you need to regularly keep track of all your investments. The question is when and how often do you need to evaluate your holdings or investment accounts. If you plan to check the performance of each of your investments every day, you could turn into an ineffective investor. Watching the ticker daily will expose you to too much activity in the market, which in turn can negatively affect your investment decisions. Instead, you can opt to check each investment once every week. Some investors even evaluate their portfolios once every month.

If you plan to invest in foreign currencies, you can use tools that can automatically limit your losses or maximize your profits once the currency price level that you specified has been reached. This spares you from checking your forex investments on an hourly basis.

4. Be Specific When Setting Metrics

As an investor, it is vital that you have a gauge that will allow you to determine if you are meeting or getting closer to your objectives. Saying that success is attained only when you have not lost a single cent on your investments is an ineffective metric, not to mention impossible to achieve. Be realistic and specific when setting your goals or metrics. Expert investors take a certain percentage of the value of their investment accounts and use it as metric. You can use a 5 percent gain in one quarter as a good enough indicator that you are a successful investor.

blog comments powered by Disqus
Scottrade