The 4 Important Characteristics of Highly Successful Investors
The stock market is a name for several markets where buying and selling financial assets like bonds, shares and other kind of securities takes place. The initial sale of shares of a company takes place in the primary market while the trading of stocks for profit typically takes place in the secondary market.
Many successful investors out there have really become millionaires just by trading on stocks. This is one reason why others have lost a lot of money from trading because they jump into trading of stocks as soon as they hear it’s profitable. Many of these folks do not consider the implications of taking money into the stock market. They do not even look at the downsides.
Knowing whether the stock market is for you is the first step you should take before buying any stocks directly in the first place.
Losing huge amount of money in the stock market can result if you make the mistake of trying to go solo without seeking advice or carefully going through and having a good understanding of the stock market process. Do you have what it takes to become a successful investor?
The 4 Characteristics of Successful Investors
They Are Willing to Learn
Your idea about stocks is the first point we would consider here. What do you know about stocks? It is sheer fool-hardy to go about pursuing something you know nothing about with some of the most valuable assets you have in life—your money. It may be very good and right in fact to try things out, but that would be more sensible if you have so much that you would not feel too bad if you lose some. Even if you have so much, going ahead to invest in something you know little about is like throwing money in the air. That should sound stupid enough.
Other kinds of investment like Index funds may definitely be right for you if you cannot spend a good time doing research on the most profitable areas of the market to expand your investments. This would take time and effort, but it is more than necessary if you want to reach your target earnings always.
How do you intend to reach your target earning? It is at this time you put the things that are most important to reaching your goals in order and make decisions on the best choices to make at any time.
Spending time to research would also be impossible if you are not a lover of learning and the most successful investors are always hungry to learn,
Experts in the stock market still spend hours on end doing research and studying stock market activities to get the best results. If you do not have a financial background, it may not be wrong to invest in the stock market, but you really have to be a wild learner because experts say you may need an MBA level understanding of stocks to trade successfully.
They Are Willing to Take the Risk
The amount of risk you can tolerate is a determining factor in whether you should invest in the stock market or not. If you cannot watch a good amount of money, you just invested disappear for some time or completely, the stock market may not be for you.
As much as people make millions of dollars on a monthly or yearly from trading in the stock market, the losses may be just as much. Even the most expensive stocks today may just drop down to a few cents tomorrow. Who knows? You may buy a stock for a huge amount and sell it under pressure for far less. In short, there are risks involved and if you want to be a successful investor, you must be willing to take the risk.
The stock market is dicey, and experts have likened participation in the stock market to a game.
The stock market is more like a place for those with an extra heart.
They Are Patient
The stock market may not also be a place for you if you are impatient. Profiting from stocks also demands patience. You are not just going to make money from simply buying and selling stocks. You will actually make money from trading in the stock market if you are able to endure long periods of fluctuations in the stock market as you wait for the right time to sell your valuable stocks and make a profit. This is definitely a mental and physical thing because the pressure to sell may thrust you back and forth and make you want to back down from our resolve.
Some experts’ advice that you should earn enough to be able to close your ears until these storms of stock price uncertainties settle at the price at which you want to sell off your stocks.
If you are looking at getting rich in a short time, trading stocks may not be the best option for you. You may want to consider investing your money in other places where you get exactly what you want. Stocks grow with companies. Amazon shares sold for just $18 during its initial public offering, but at the time of writing this article, it costs about $1,1762 on NASDAQ. This is a clear example of how company growth can affect the stock price. Anyone who was foresighted enough to buy an Amazon share at that price would have made just about 100% in profit if he or she decides to sell the share at this time.
They Possess Number-Crunching Skills
Strategy, analytical skills and a good knowledge of numbers would definitely pay off in the stock market. The stock market may not be for you if you are scared of the slightest need to crunch large or small numbers or make good predictions from graphs. Little wonder, mathematician Jim Simons became a billionaire from coming up with an algorithm that was able to predict the fluctuations in the stock markets with beautiful precision. Knowledge of accounting and balance sheets is also required if you really want to do well with trading stocks.
The stock market is not just about numbers. Information about the status or activities of the company you invested in is more than important. You may need to subscribe to news channels like CNBC and other financial media to stay abreast of the happenings in the stock market. Reading of newspapers and subscriptions to newsletters and updates are things successful investors in the stock market find most exciting. If you have the time, or you feel comfortable with activities like these, you may be making the right decision of investing in stocks.
It is highly recommended getting information from experts others even feel what really happens in the stock market is different from what the media says. They assume that there is an inner group of people behind the scenes who have perfect firsthand information about what was going to go where in the stock market and so whatever plan you were going to come up with would be flawed.
The Bottom Line
Highly successful investors know the hard truth about stocks. That they fluctuate and to get the best out of them you just have to be good at toeing the line of its uncertainties. If you are not ready to learn the ins and outs of the stock market, then investment in the stock market is not for you.