As an individual investor, it can sometimes seem like the stock market is impossible to beat. But you've also heard plenty of stories about regular folks like you making good investments and reaping the rewards. So how do they do it? Successful investors tend to have some of the same traits and habits, a few of which we will detail below:
- Level-headedness – The stock market by its very nature is volatile. While you may experience some discouraging lows, making a rash decision like pulling all of your money out of the market may not be the wisest choice. Never base your decisions about money on spur-of-the-moment emotions. This will usually result in missed opportunities once the stock market recovers.
- Making internal evaluations – We often compare our success against other traders'. Most of the time this turns out to be a depressing activity. You should instead look at your progress over a period of time. Have you learned something over the past year? Has your portfolio increased in value over the past six months? These are the things you should be concerned about.
- Patience – Understanding that investing in the stock market is not a get-rich-quick scheme is important knowledge for every investor. In your first few months of trading, you should not become discouraged about small or non-existent returns. Improving your portfolio will take time and dedication, but you will be satisfied with the eventual outcome.
- Taking responsibility – Don't blame others for your bad choices. You should seek advice, study and learn from your mistakes to prevent them from happening again.
On your journey to becoming a successful investor, you should consider using SmartStops' portfolio analysis software to keep you apprised of changes in the market that may negatively impact your stocks.
Categories: Risk Management, Trading & Portfolio Strategies