Have You Got It In You To Be A Good Stock Market Investor ?


wealthymatters.com

Can you honestly say ‘YES’ to the following questions ? If so, you are cut out to be a good investor if you have good systems in place,cultivate good investing habits and gain sufficient experience.

  • Are You A Businesspeson ? Warren Buffett has been known to say”I am a better investor because I am a businessman, and a better businessman because I am an investor.”A businessperson understands how his/her own companies work and respond to their environments.He/she can then extrapolate this experience to look beyond the numbers of other companies.And this makes them better investors.
  • Are You Sufficiently Brainy ? Being a top notch investor requires a certain amount of brains-the sort of IQ that the average college graduate might have.But EQ is equally important.Too much IQ and a person will handicap himself and too little might make the constant learning associated with investing a drag.Warren Buffett has been know to say that”Success in investing doesn’t correlate with I.Q. once you’re above the level of 125. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.”
  • Are you good with numbers ? Advanced math such as calculus is irrelevant  to your success as an investor.But you do need to master pre-university math concepts and constantly apply them in daily life while thinking about your investments.Also you should be able to seize on the most important nuggets of information in a sea of data and act upon them 
  • Can you remain confident and humble at the same time? You need the confidence to act on your independent analysis,literally put your money on the line despite what the world round you might be doing.But on the other hand you need to be able to accept that you are not above making mistakes or missing out on something that’s obvious to others.You need the humbleness to listen to others,to stick to stocks and businesses that you understand,to stick to investing methods you know , to avoid excessive leverage and to diversify sufficiently to avoid being wiped out by a wrong call.
  • Are you independent enough? Can you manage without the comfort of being part of the the crowd and at the same time not derive any pride from standing alone ? Can you do your own thing and hold your own course despite what the world around you is doing?
  • Are you patient enough?  As Templeton noted, “if you find shares that are low in price, they don’t suddenly go up. Our average holding period is five years.” When money is burning a hole in your pocket and itching to fly out can you wait for the right time to buy stocks when they are on sale?
  • Can you control heuristic thinking? Many people overreact to the daily stream of economic,industry and company news that flows in every day.They anchor on irrelevant criteria and buy and sell after falling prey to a whole host of mental mistakes triggered by the brain working through heuristics.Can you control this very human failing and invest on the basis of solid analysis?
  • Can you love an investor’s life? Buffett has said at various times: “I’m the luckiest guy in the world in terms of what I do for a living” and “I wouldn’t trade my job for any job” and “I feel like tap dancing all the time.”A large part of an successful investor’s life deals with sitting down and reading,thinking and writing down investment ideas.Very little time is spent in actually trading stocks.Will this B – type lifestyle work for you?Or will it drive you crazy?

If you can honestly answer ‘YES’ to the above questions and you are inclined to become an investor in stocks,maybe it’s time to learn the most successful strategies of investing in stocks.

About Keerthika Singaravel
Engineer,Investor,Businessperson

5 Responses to Have You Got It In You To Be A Good Stock Market Investor ?

  1. Pingback: On Why Money Management Is a Great Business « Wealthymatters

  2. Yvonne Pareira says:

    Most definitely a nice quiz.

  3. Adah says:

    Nice article.Thanks.Great blog.

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