And how to attain them
Believe it or not, I was once a clueless fellow desperately seeking success in the stock market. To find it, I went above and beyond to discover what separates the most successful investors in the trade from the rest of the herd…
And then emulate their success.
Now, you might think this will be another one of my mechanical system + mindset talks.
But it’s not.
Not all successful traders share my investing approach. That’s because there’s more than one road to consistent profitability in the stock market.
Yet, no matter which road you choose, you’ll need to internalize the 16 traits I’ll share with you today (and next week) to tread it successfully.
Sure, you probably already possess a few of these traits. Or at least you know you should adopt them. But if you aren’t 100% sure you’re all set for long-term success in the stock market…
At least skim this article to see if you’re missing a key piece of the puzzle.
You might just find it in the lines below like I did.
The only difference is I looked for that key piece for years. And you can find it in minutes.
With that said, let’s dig into the first 8 out of 16 traits almost all successful investors share:
Trait #1: Always Treat Your Money With Respect
When I say “respect” your money, I mean stop investing haphazardly.
And if you don’t have a clearly defined plan and an end goal — you’re doing exactly this.
Instead, you should cherry-pick only the investing opportunities worthy of receiving your investment capital. Everything else is an unnecessary distraction.
Sounds straightforward, yet nary a few investors actually apply this reasoning in practice. To do so, you need exact rules about how, when, and what type of investment opportunities you’ll consider.
In other words, you need an investing process you 100% believe in and stand behind.
Adopting the mantra “If you stand for nothing, then you’ll fall for anything” is the first step I took towards starting to truly respect my money.
If you want to do the same, define what you stand for now. And then build your investing process around it.
Trait #2: Embracing Risk
The best players understand the investing game comes with inherent risks. And that rewards won’t come without embracing them.
But they never do so blindly and without a plan.
Instead, they accept, account for, and manage those risks. They know exactly what degree of risk they are willing to take to reach their end goal.
How about you? What financial goals do you expect to fund from the stock market? And how much risk are you willing to take to make those goals a reality?
Find the right balance for you — and you’ll be rewarded.
Trait #3: Always Be Coachable
Yes, you can learn from your own mistakes and become a successful investor with time and practice.
But if you allow someone who’s already “living your dream” to guide you instead of going at it all alone…
You’ll drastically short-cut the process. Plus, you’ll safeguard your emotional health.
“Intelligent individuals learn from everything and everyone; average people, from their experiences. The stupid already have all the answers.”
― Socrates
Now, I recognize finding the right mentor is far from easy. But it’s definitely worth at least trying to do so.
If you find one, you’ll have someone who helps you push through hard times filled with despair. And inspire you to continuously learn and develop.
Not all successful investors have had a mentor, sure. But they were always eager to find better ways of doing things.
Try to open your mind like this and constantly be on the lookout for opportunities to improve your investing process.
Trait #4: “Know Thyself”… And Know Your Limits
You must first learn to crawl in the stock market before trying to sprint your way through it. Meaning you should never try to invest in things you don’t fully understand.
Investing without the necessary skills and knowledge is the biggest mistake you can make as a self-directed investor. To avoid it, “just” be honest with yourself.
Accept who you are now and your current skillset. Then define who you want to become and what it takes to get there. Question your limits at every step of the way, and you won’t suffer the “getting in over your head” losses most investors deal with on a regular basis.
Finally, always remember you don’t need to know it all to become a consistently successful investor. It’s more than enough to focus only on the things that will get you to YOUR desired end goal, not anyone else’s.
Trait #5: Always Be Prepared — Map Out Your Investment Plan
Some investors think they don’t need a precise, written-down investment plan.
Others realize they do but never make one.
So, by actually going through the process of making a plan, you immediately get ahead of 95% of investors.
Why?
Well, first because putting pen to paper instantly lets you flow into a big picture perspective of your long-term investing goals and methods.
All the greatest investors understand this. And consequently define how, when, and why they are investing. Then, their mapped-out Investment Plan guides them toward making the right decisions at the right time.
Plus, a detailed and well-prepared Investment Plan helps you monitor your progress, measure your success, and most importantly, hold yourself accountable.
But how do you know if your Investment Plan is good?
In my experience, good plans have these 4 characteristics:
- They state a clear picture of your current financial situation and where you want to go
- They nail down WHY you want to go there
- They precisely define your investing strategy – HOW you’ll get there
- They help you define the risks you’ll encounter with your investing approach and the steps you’ll take to mitigate them
It doesn’t matter if you’re a beginner or a seasoned investor — crafting a good Investment Plan will help you see tangible financial gain over the long term.
Because without one, you’ll get sucked into making short-term and haphazard predictions that have nothing to do with reaching your investing destination.
Consistently successful investors don’t predict — they prepare.
So, start preparing now by crafting at least a draft of your Investment Plan.
Trait #6: Be Humble Enough To Surrender To The Process
You can take virtually any person from the street and turn them into a successful investor.
To do so, you need to first teach them entry, exit, and positioning sizing rules. And then help them find the discipline to commit and surrender to their tried-and-tested investing process.
That’s exactly what consistently successful investors do — they never let their egos and pride throw them off course.
So, if you have a verified investing process and method, using it with discipline and without exception is the surest way to achieve long-term profitability in the stock market.
Trait #7: Stay Vigilant Throughout Various Market Conditions
To succeed in the stock market, you must always be ready to take action. Meaning you should have a plan for every possible scenario in the market…
And then execute it through thick and thin.
Being vigilant especially applies to overheated bear markets.
Then, you should be cautiously patient and protect your capital, so you can extract your cash and live to fight another day.
To do this, you need a well-defined timing and exit strategy based on your risk preferences. Just crafting one produces a crazy liberating feeling because you know exactly what you stand to lose and gain.
In other words, you’ll always know what to do to respond to rising and falling markets. Meaning you can invest without fear and anxiety.
Try defining your timing criteria and see if I’m right. You’ve got nothing to lose but much to gain. It’s very liberating…
Trait #8: Consistency Is Key
I’ve talked about the importance of building a mindset of consistency over and over again. So, I’ll keep it brief today:
Being consistent helps you identify when and why something went wrong. It also eliminates on-the-fly subjective decisions and ensures you can easily repeat successful behaviour.
Plus, when you rely on consistent rules and criteria, you don’t need to spend days, weeks, or even months solving the same old problems before making an investing decision.
Becoming truly consistent isn’t easy. But the first step to doing so is defining exactly the rules you’ll follow. And then giving it your all to never stray from those rules.
Stay Tuned For The Remaining 8 Traits Virtually All Successful Investors Share
I realize most people aren’t like me. Meaning they don’t view reading long-winded texts about investing as pure pleasure.
Plus, combining all 16 traits into one post would make it hard to even skim that article.
So, I’ve decided to split the topic into two posts. Next one goes live next week.
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