The best character qualities that will help the investor make money

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15 Characteristics of Highly Successful Investors

Are you a trader or investor? Have you ever wished you were an investment whiz kid like Warren Buffett, Peter Lynch or George Soros? Would you give everything just to become successful as these men? What special characteristics do highly successful investors possess that you don’t? If someone offered to explain to you in detail the basic characteristics possessed by every successful investor, will you listen and learn whole heartedly?

If your answer to the last question above is yes? Then please read on as I share with you 15 characteristics possessed by successful investors such as Warren Buffett.

“The philosophy of the rich and the poor is this: the rich invest their money and spend what is left.

The poor spend their money and invest what is left.” — Rich Dad

“Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” — John D. Rockefeller

15 Characteristics of Highly Successful Investors

1. Highly successful investors are proactive learners

“To learn new things; you might need to unlearn old thought and tricks. Both processes can never be achieved without humility.” — Ajaero Tony Martins

“The rich invest in time, the poor invest in money.” — Warren Buffett

2. They always invest with a planned exit strategy

“Go to the mouse you foolish investor and learn. A mouse never entrusts its life to only one hole.” — Ajaero Tony Martins

“Always start at the end before you begin. Professional investors always have an exit strategy before they invest. Knowing your exit strategy is an important investment fundamental.” — Rich Dad

“Many people rush into the game of investing thinking they are predators. When they get to the middle of the game, they then realize they are the prey and try to escape but it will be too late. Only the preys with a well defined exit strategy will escape, the rest will be slaughtered by the real predators.” — Ajaero Tony Martins

3. They are patient

“I never attempt to make money on the stock market. I buy on assumption they could close the market the next day and not re-open it for five years.” — Warren Buffett

4. Highly successful investors have strong emotional control

“Every few seconds it changes, up an eighth, down an eighth. It’s like playing a slot machine. I lose $20 million, I gain $20 million.” — Ted Turner

“To be a successful business owner and investor, you have to be emotionally neutral to winning and losing. Winning and losing are just part of the game.” — Rich Dad

5. They have a well defined investing strategy

“A winning strategy must include losing.” — Rich Dad

“Diversification is a protection against ignorance. It makes very little sense to those who know what they are doing.” — Warren Buffet

“The wise man put all his eggs in one basket and watches the basket.” — Andrew Carnegie

“Buy when everyone else is selling and hold when everyone else is buying. This is not merely a catchy slogan. It is the very essence of successful investments.” — J. Paul Getty

6. They are focused

“The men who have succeeded are men who have chosen one line and stuck to it.” — Andrew Carnegie

7. Successful investors use trend to their advantage

“Your greatest and most powerful business survival strategy is going to be the speed at which you handle the speed of change. That speed of change is trend.” — Ajaero Tony Martins

Another attribute of successful investors is that they know how to use trend to their advantage. Average investors panic over market fluctuations but professional investors welcome these fluctuations because it’s based on these fluctuations that they make their money.

Successful investors use trends such as market sentiments, political instability and company’s crisis to their advantage.

“Look at market fluctuations as your friend rather than your enemy. Profit from folly rather than participate in it.” — Warren Buffett

8. They are persistent

“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.” — Henry Ford

“Most people give up just when they are about to achieve success. They quit on one yard line. They give up the at last minute of the game one foot from a winning touch down.” — Henry Ross Perot

9. They thrive on risk

“Risk comes from not knowing what you are doing.” — Warren Buffett

“Seek advice on risk from the wealthy who still take risks, not friends who dare nothing more than a football bet.” — J. Paul Getty

10. Successful investors are disciplined

“My two rules of investing: Rule one — never lose money. Rule two — never forget rule one.” — Warren Buffett

11. They know how to use leverage to their advantage

“The most important word in the world of money is cash flow. The second most important word is leverage.” — Rich Dad

“Financial leverage is the advantage the rich have over the poor and middle class.” — Rich Dad

“If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” — J. Paul Getty

12. They learn quickly from their mistakes

“Even a mistake may turn out to be the one thing necessary to a worthwhile achievement.” — Henry Ford

When investors talk of experience, they are simply talking about the trials faced, mistakes made, lessons learned and triumphs achieved. You can never become successful investors without making some miscalculations or mistakes.

Successful investors make mistakes but they are not discouraged by these mistakes because they know mistakes are part of the process to becoming a better investor. Average investors perceive mistakes as bad but successful investors see mistakes as an opportunity to learn something new.

“Only those who are asleep make no mistakes.” — Ingvar Kamprad

13. They have a team of professional advisors

“It is better to hang out with people better than you. Pick out associates whose behavior is better than yours and you will drift in that direction.” — Warren Buffett

If you observe successful investors closely, you will notice they have a team of professional advisors. Average investors try to beat the market alone while professional investors invest as part of a team.

Successful investors also have a network of friends made of professional investors. They share advice and brainstorm on investing challenges with their investor friends. Do you want to be a successful investor? If yes, then it’s time to start choosing your friends carefully. Remember, birds of the same feathers flock together.

“I have been within the four walls of school and I have been on the street. I can confidently tell you that the street is tougher, challenging, daring, exciting and more rewarding. In school; you play alone. But on the street, you play with the big boys.” — Ajaero Tony Martins

14. They have a strong financial background

“Business and financial intelligence are not picked up within the four walls of school. You pick them up on the streets. In school, you are taught how to manage other people’s money. On the streets, you are taught how to make money.” — Ajaero Tony Martins

Just as stated in the quote above, you only become a better investor by being on the streets. Successful investors have a solid financial foundation; a foundation molded on the streets. On the streets, you learn from your own experience. Successful investors build up their financial base by attending seminars, reading books and journals, learning from a mentor and listening to tapes; after which they go out on their own to gain street experience.

Average investors try to hone their investing skills while still striving to avoid loss. Successful investors on the other hand know that experience come with losing money and learning from the loss.

15. Successful investors are passionate about the game of investing

“Men of means look at making money as a game which they love to play.” — J. Paul Getty

Why are you an investor? Your answer to this question will determine if you will be successful in the world of investing or not. A famous author once said this: “if you are going to play a game, choose a game you can play throughout your life time and investing is one of such game”.

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If you take a look at average investors, they are always after how much they are going to make now but successful investors use delayed gratification and compounding to gain an edge.

“Wealth is only a benefit of the game of money. If you win, the money will be there.” — J. Paul Getty

In conclusion, these are the 15 characteristics possessed by every successful investor. If it’s your desire to join this league of investors, all you need to do is gradually develop these characters. As a final note, I want to state categorically that becoming a successful investor is within your reach. Just model the masters of the game and you will see yourself improving.

Author Biography

Ajaero Tony Martins is a serial entrepreneur, investor and a prolific blogger. He blogs about his entrepreneurial experience and provides hard core business development strategies on StrategicBusinessTeam.com, You can also follow him on twitter @StrategicTeam

Copyrighted 2020. Content published with author’s permission.

6 Personality Traits of the Best Investors

Successful stock market investors have several traits in common. The more your own style mimics the greats, the more likely you are to produce profits. These successful traits include patience, focus, and doing your due diligence in researching your investments.

Patience

Above and beyond all the other traits, the degree of patience you possess with impact your final results. Perhaps this is because patience is actually the exact opposite of the profit-killing emotions which plague most investors, such as impatience, greed, and fear.

In fact, a steady hand will often eliminate all the stock market mistakes which come along with frustration or anger or regret. In the world of investing, patience means profits.

Ability to Tune out Noise

This personality trait will serve you well, whether we are talking about the stock market, mainstream media, or even noisy kids. With constant distractions, and the constant interruptions of advertisements each day, how can anyone survive unless they are able to ignore the commotion?

Even if we focus solely on the stock market, the deluge of data points and numbers is still far beyond overwhelming. The better you can get through all the mixed messages and contrarian opinions, the greater your final trading account balance. Don’t get discouraged, you will find that you get pretty good at this stuff, and pretty quickly too!

Staying the Course

Have you ever sold a stock, only to watch the shares climb higher? Similar to its close cousin “patience,” staying the course should typically help you remain ahead of the pack.

Said another way, trading more often does not usually result in greater or better trading profits. Quite the opposite, actually—the frequency of trading is typically inverse to profits.

Calm in the Storm

When the sky is falling, and crowds are trampling one another to dump their shares, the investors who remain calm win. In fact, the relaxed and thoughtful people among us will be able to recognize all the undervalued opportunities that others miss during the frenzy.

Doing the Homework

Rather than bet on opinions based on limited knowledge, successful investors continually learn. Most people make decisions based on sound bites or partial arguments. ​​

In contrast, the greatest stock market traders conduct their own due diligence—and learn—until they know which investment moves will pay off. When they aren’t sure about a trading move, they learn more—until they know plenty, and have a pretty solid understanding of their potential choices.

Asking for Knowledge

Great stock market investors are wise enough to know what they don’t know. They lean heavily on the opinions and knowledge of experts and specialists.

They are also not too proud to ask questions, and they tend to spend the time, in the beginning, to get all the facts, rather than doing their learning once it is too late. In other words, they make sure that they are well-informed and well-prepared.

The beauty of all of these personality traits of the great investors is that they can easily be replicated by you, right now. You won’t need to be Superman or some trading troll in a dark basement with 7 monitors—just put in the work required to make wise choices, and stay calm even during the greatest market panics.

3 Traits You Need to Be a Great Investor

The Characteristics All Successful Investors Have in Common

There are a handful of things that many great investors have in common. These traits fall into three broad categories:

  1. The right temperament
  2. The ability to value assets
  3. An appropriate understanding of risk

By developing them, you stand a chance at increasing the odds of reaching your financial goals, just as an athlete does by training in a gym.

Investors may look to earn income from dividends,—the distribution of company earnings—or from interest income—earned from interest-bearing holdings like bonds.

1. To Be a Great Investor You Need the Right Temperament

If you strive to achieve good investment returns, you need the right temperament. It is important that you realize temperament is different from knowledge, intelligence, wisdom, and discernment. Investors need patience. In the words of famed investor Warren Buffett, “some things just take time, you can’t get a baby in one month by getting nine women pregnant”. There is a lot of truth in his statement.

Being able to tune out the noise is important. This is the ability and willingness to stick to a plan while ignoring the crowd. You need a firm grasp of financial history to know what works. As an example, buying assets for less than they are worth at attractive discounts to net present value (NPV) and then holding to collect the dividends and interest income. You need to have the fortitude of character to remain steadfast.

During the 1990’s dot-com bubble, some of the best investors in the world who refused to give in to the insane stock prices of the time—thus appearing like “dinosaurs” and “old men”—were sent letters asking if they were waiting for the second return of Elvis. Don’t be swayed by public opinion.

Investors also need the emotional capacity to separate normal market fluctuations from the underlying real value of an asset. If you bought an apartment building in your hometown that generated $50,000 per year in passive income from rents and someone came up to you, offering to buy the place for $100,000, or 2x earnings, you’d likely ignore them or laugh in their face. If the same thing happened in the stock market, many people are apt to panic and accept the deal! It’s very hard to get rich doing that.

2. To Be a Great Investor You Need the Ability to Value Assets and Businesses

If you’ve researched stocks at all, you know it is vitally necessary to possess the ability to calculate the intrinsic value of an asset. It doesn’t matter if that asset is a car wash, a government bond, a share of stock, a dry cleaning business in your hometown, or an international hotel conglomerate. Unless you can pull out a calculator and run the formulas yourself, you are always going to be operating at a significant disadvantage to the competition, much akin to a blind person trying to win a sharpshooting contest.

At first, the math involved can seem impossible, daunting, and downright confusing. However, if you continually remind yourself that all you are trying to do is answer one question: “How much should I pay for $1 of net present value earnings?”, you’ll be surprised how clear this simple mantra will keep your thought processes clear. The answer to that question can mean rejecting 90 or 95 out of 100 investment opportunities but remember this: it only takes a handful of good decisions to get rich or reach financial independence.

3. To Be a Great Investor You Need An Appropriate Understanding of Risks, Both Implicit and Explicit

Mark Twain once said that history doesn’t repeat but it does rhyme. There is, perhaps, no better preparation for managing money and building your net worth than a firm grasp of financial history. There wasn’t a fundamental difference between the real estate bubble, the dot-com craze, and the Dutch tulip bubble a few centuries prior. By arming yourself with an understanding of the human psychology that can influence the buying and selling decisions of individual men and women, you can improve your chances of avoiding mistakes that could hurt your family’s well-being.

Personally, I follow the mental model approach. A mental model is an idea, a concept, that is used as a tool to help you avoid making poor decisions. Mental models include things like the Horns Effect and Halo Effect, Veblen Goods, The Illusion of Choice, and Information Asymmetry. It may not be evident at first why these concepts are important to business and investing but studying them, adjusting for them, and putting them to work in your own endeavors can help grow your bank balance year after year.

The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.

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