No matter the time and age, the secret to successful investing remains the same. In fact, there’s really no secret whatsoever. At the end of the day, it’s all about common sense. Follow the lead of successful investors and you’re bound to enjoy some amount of success if you stick with what worked for others.
Below are six common habits successful investors have that you can adopt and incorporate in your investing strategies:
Set short term and long term goals
Like with anything worthwhile, you need a plan if you want to succeed as an investor. You need both short term and long term goals if you want to know where you’re going. When settling goals, it is very important to be as specific as you can be. For example, how much profit do you want to achieve in 3, 5 or 10 years’ time? Don’t just a lot. Set an amount you can use as your investment milestone.
Avoid investment hypes and fads
Just like there are fashion fads, there are also investment fads. These are investment strategies promoted by so called gurus because they worked now but necessarily sustainable in the long run. For example, some gurus may recommend going after investments that are high performing because they give you high profits at the moment. You go on to tweak your investment strategies based on some conditions. It may work for a while but again not necessarily in the long run.
Understand the market’s volatility
Whether you like it or not, there are going to be stock market crashes. These crises, in fact, are inevitable because no matter how slick of an investment you may be, the stock market is volatile. There is no predicting when they may happen. The best thing you can do as an investor is expect that they may happen and when it does, you’d want your portfolio to be diversified enough to weather the economic crash.
Never try to time the market
Some so called experts think they can outwit economic crises by timing the market but that’s never the best idea. Some may get lucky from time to time but most often than not, the market will just simply surprise you. Rather than attempt to time the market, you are better off focusing on investment strategies that have withstood the test of market volatility over time.
Avoid making emotional-driven decisions
Like any investors, there comes a time when you may want to make a major decision based on what you feel. Sadly, such decisions only end up in disaster because other than the market, your emotions are just as volatile and therefore unreliable when making investment decisions. The trick is to stop being emotional when it comes to your money. When the market crashes and you lose your investment, don’t sell low because your emotions tell you to. Always go back to your investment goals and based your decisions on the fulfillment of those goals.
Don’t mind short term predictions
No matter your investment goals, it is always best to stick with what has always worked rather than relying on short term predictions by experts with little to no track records. Some short term predictions actually happen and that might tempt you to tweak your strategies in favor of said predictions. Again, they may work a time or two but not all the time. In the end, you are better off developing a plan based on the long term record of the market. This way, you’ll amp up your chances of investment success big time.