By Shai Angel
One of the most important activities in our lives is investing, which requires knowledge of the assets we buy and the correct personality attributes to make profitable investments. Certain traits that successful investors like Peter Lynch, Charlie Munger, Monish Pabrai, and Warren Buffett have in common help them achieve success. Gaining knowledge of and cultivating these qualities can greatly increase your chances of making lucrative investments. Successful investors share the following personality qualities in common:
- Decisiveness
Good investors act decisively. Hours of evaluation are meaningless if one cannot make a firm decision. Indecisiveness can lead to missed investment opportunities.
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- Actively Passive
Successful investors are “actively passive.” They actively seek good investment opportunities but, once committed, become relatively passive, holding their investments for the planned duration.
- Inquisitiveness
Successful investors ask numerous questions to avoid regretting bad investment decisions. They thoroughly understand all aspects of an investment, conducting independent research and seeking clarity on details.
- “Be fearful when others are greedy and be greedy when others are fearful”.
This famous saying belongs to none other than legendary investor Warren Buffett. Good investors appreciate that their emotions (especially greed and fear) can act as their worst enemies and lead them to make bad investment decisions. Good investors recognize that the “point of emotional surrender” is also the “point of maximum financial opportunity”, and vice versa. They don’t panic and don’t rush to take advantage of momentum-based trends.
- Realism.
Successful investors view situations objectively. They maintain moderate expectations consistent with long-term trends and disregard noise from news channels, evaluating investments based on data and logic.”
- Patience
This is the most important quality you can have as an investor. Most investors lose by acting on their emotions. Examples of these emotions are greed and fear. You must be patient to resist them. Keeping your patience allows you to actively eliminate any mistakes you might make in your journey as an investor. Therefore, to make a profit, be patient.
Monish Fabray, one of the best investors in the world, gave an example of the importance of this principle in one of his interviews. He said if you are one of those who can sit on a plane in a seat next to the window and look at the view for a long time during the flight and enjoy it throughout the flight, you are already qualified to be a value investor. The fact that you don’t get “bored” and have so much patience to stare for a long time at the view from the airplane window shows that you are patient and, therefore, your chances of succeeding in the investments you make will increase.
- Determination
The road to success in investing is full of challenges, difficulties, hard work, and sacrifice. Determination requires you to do extensive research to know exactly what to do and do it well so you can reach your goals. This is a necessary trait for you to be a successful investor.
- Stay Focus
In the world of investing, staying focused is known as keeping your eye on the ball. Along the way, you see other goals that seem more attractive than what you already want to achieve. If you are not focused, it can distract you. This will not only waste your time, but it can also cause you to completely miss your original goal. So, keep your focus and desired results.
- Flexibility
Just like any other highly rewarding path, investing has a collection of twists, turns and challenges along the way. Sometimes the goal seems close and other times it seems further away. There are always some external conditions that affect the markets. Economic performance, politics, natural disasters, social change, and market activity are examples. The only constant is change. Therefore, you need to be completely comfortable with adaptation and respond positively to constant change. Be prepared to adapt in real time. While doing this, don’t change your course too often in a hurry. Support every move you make with concrete evidence. This will allow for logical flexibility and success as an investor.
- Humility
Despite their abilities, successful investors remain humble. If you stay focused on profit and gain investment knowledge, you can succeed in the market. As a result, your self-confidence can go very high. You can feel that you can do anything in life. This will require you to divide your attention tremendously and may leave too little time and energy for the actual investing business. Therefore, be humble and delegate some of your responsibilities to qualified people to carry them out. This will allow you more time for investment and keep you in touch with reality.
In conclusion, you can improve your approach to investing and raise your chances of success by embracing these personality traits. You can traverse the complexities of the market with more resilience and confidence if you incorporate the knowledge of seasoned investors such as Warren Buffett into your strategy.
Shai Angel, CPA, the author, earned a master’s degree in law, a bachelor’s degree in accounting and economics, and a certificate in director training. He has previously held senior financial positions in well-known businesses. In his years of working in the financial industry, he has participated in the capital market and actively learned about “Value Investing” from some of the biggest investors in the world, including Warren Buffett, Peter Linz, Monish Fabray, and others. He has also applied their investment strategies.
