When will you be a successful investor? Will it be when you achieve a certain percentage rate of return on your investment capital over a specified period? Or maybe a certain percentage of profitable trades out of a specified sample, or will it be someday—somewhere off in the future, when you’ll suddenly arrive and think, “I made it! I’m a success!”
Unfortunately, that’s how most unsuccessful investors see success: as something to strive for and hope to reach “someday.” Yet for the vast majority, that elusive ‘someday’ never quite arrives.
Almost everyone has a picture or concept in their mind of when they think they will know they are a ‘success’, and how they will measure this success. Many people use material things as a measure – a bigger house, newer car, bigger bank account, larger investment portfolio, just to name a few.
In most people’s minds, success is something way off in the distance that they will run themselves ragged to get to – if they ever get to it at all – because they don’t have a real plan for HOW they will get there, and the steps they will take along the journey towards this ultimate so-called place. The problem is that the measure always remains relatively ‘bigger’ to their then current position thereby keeping success out of reach “somewhere over the rainbow”.
Instead of viewing investing success as a destination we will arrive at someday and at some pre-determined point, what if we viewed it as a journey? And as part of this journey we had ongoing processes for growth, learning and development on a continual basis at various steps along the way.
In this way, we are able to measure our investing success in stages as we proceed along our life journey. Success becomes measureable, attainable and quantifiable, rather than an esoteric ‘thing’ somewhere off in the distance.
Some ways we can measure our success as investors include:
- The use of a measurable, quantifiable method or system for determining our investment choices.
- Knowing our investing purpose, and at another level, our life purpose.
- The implementation and use of a trading plan.
- Acknowledging the outcomes of investment decisions as neither good nor bad. They are just a series of events that have been executed according to a systemised process on our long term journey.
- Taking every signal that we need to take in our trading system, and sticking to the plan regardless of the short term ‘market noise’ and individual trade outcomes.
- Measuring the growth of our portfolio’s over a large sample of multiple 100’s of trades, rather than every day over small samples.
- Measuring our own personal growth and development by how well we have executed the rules of our trading strategy when under the pressures exerted by financial markets.
- Reflecting on what we learn from the markets and others around us by gaining big picture perspective of how strategy will perform over a large sample of market events over many years.
Once we accept success as a journey rather than a destination we realise that we can never exhaust our ability to continue to grow and improve our skills. We also realise that the capacity to continue to expand our wealth and investments is unlimited, provided we have a systemised plan to assist us to stay the distance and withstand all the challenges that we know we will inevitably come across on our journey.
At some stage we realise that we will never arrive at a perceived final destination, and nor do we want to, because the experiences encountered on the never-ending journey are far more important than reaching a final destination.
Perhaps the major benefit though, is that instead of having to constantly push towards some future measure of success, we have the potential to be a success today, everyday! By simply, accepting that each and every step of our journey is important, measurable and purposeful. By executing todays steps according to how we have defined them, to the best of our ability, we can be successful right now, today, rather than having a vague hope of getting ‘there’, someday’.
Unless we redefine what achieving success is we stand the risk of becoming a Tantalus, unfulfilled, deprived of financial nourishment and always reaching for that elusive ‘something else’.