3 Characteristics of a Successful Stock Market Investor

3 Characteristics of a Successful Stock Market Investor

Ever wonder why some stock market investors seem to have the magic formula for winning on the stock market while others continue to make perpetual losses? It’s not because some investors are more brilliant than others but it all comes down to a few traits or characteristics that set apart the average investor from the successful investor. When you think of a successful investor, you probably think of persons such as Warren Buffet, Benjamin Graham, Peter Lynch and others. These investors have characteristics that help them to be successful investors.3 Characteristics of a Successful Stock Market Investor

  1. Patience – Those investors who are looking for a get rich quick opportunity will be disappointed in the stock market. Those who succeed on the stock markets are those who have a high level of patience and who are willing to ride out the ups and downs of the stock market. Warren Buffett himself learned the value of patience early in his life at the tender age of 11 years when he bought Cities Service Preferred shares for $38. Even though the stock price fell to $27 he held his stocks until the price rose to $40 at which time he sold and pocketed the $2 profit. However, had he waited a few more days, he would have made a much greater profit when the stock rocketed to $200 per share! This is a lesson that has guided Buffett’s investment career ever since. All would-be successful investors can learn a lesson from this.
  2. Willingness to Learn – The stock market may not turn out to be a good place for persons who like to gamble and speculate. While every now and then, speculation may pay off, for the most part stock market speculation is akin to gambling ie. placing your money blindly in hopes that you will hit the jackpot. On the other hand, smart and successful investors are those who are willing to spend the time necessary to learn about the companies in which they invest their hard-earned money. In other words, those who learn fundamental analysis and how to interpret company financials, are in a better position to succeed on the stock market than those who purely speculate. As the saying goes, ‘the numbers don’t lie”, that is if the numbers aren’t fudged in the first place. Benjamin Graham is a classic example of someone who has profited from his commitment to fundamental analysis.
  3. Stability – This is a virtue that often runs contrary to the stock market itself. Especially in the midst of times of high volatility, the successful investor remains stable and committed to his or her original investment decisions. Changes are made only after careful consideration and concrete evidence that merits a change in direction. Otherwise, successful investors refrain from jumping ship and selling off stocks or purchasing stocks just because others are doing so. They are able to remain stable when everything else looks shaky. Again, this is a strong characteristic of the great Warren Buffet.
  4. Hone these 3 characteristics and you may well find yourself becoming a more successful investor.

3 Characteristics of a Successful Stock Market Investor…Read Above