The traits of an investor
Investors throughout the world have different ways of looking at things, different personalities and different characteristics. But after a few years of research and a lot of reading I have found that the most common and important traits are as follows:
- Due Diligence
- Consistency
- Perseverance
- Patience
Due diligence
Due diligence is arguably the most important trait of a good investor, because without due diligence your who investing strategy fall apart. As an investor it is important to do your research on possible investments, wheter it be stocks, commodities, real estate or even business ventures, you need to do your research.
With out due diligence an investor has no backbone, the bery essence of why you buy and why you sell turns into a guessing game and no longer a calculated risk. It's is important to undertand all aspects of an investment to prevent the loss of capital.
Consistency
To become a good investor consistency is key, because without consistency all your wins become lucky accidents. Consistency is key in any aspect of life, for instance if you had to pick between two teams playing against one another, team A who has won the last 10/12 games and team B who has only won 3/12 games, who would you pick? I think we can agree, team A will be the most likely choice to win. And it's the same with being an investor. Constant results means higher profitability.
Perseverance
Perseverance and patience goes hand in hand with an investors due diligence, this is because without due diligence there is no ground to persevere. Investing is a risky business and it is easy to lose your witts and sell, but it is key not to do so if you are confident of you decisions.
Patience
One of the biggest problems for new investors is panic selling, when a stock suddenly dives you think "oh no I'm going to lose my money", so in turn you quickly sell in order to prevent this. Luckily most of the time the dive in the stock price is a short term affect, whilst in the long run, the stock is set for new highs.
Warren buffet once said: "[Market turbulence] does not bother Charlie [Munger] and me. Indeed, we enjoy such price declines if we have funds available to increase our positions."