The stock market can sometimes appear to be incredibly confusing and murky. However, being a successful investor doesn’t involve a magic potion. Contrary to what the media or Wall Street might tell you, much of successful investing involves some simple principles.
With that in mind, here are some secrets of great investors:
Control your emotions
The greatest threat to your investment success is often yourself. Our emotions can cause irrational thinking, and this is amplified when it involves our wealth and the counterintuitive world of investing.
When it comes to the stock market, the biggest determinant of success is simple in theory, yet difficult in practice: stick to your long-term plan. For instance, if you’re investing for retirement, but there is a short-term downturn in the market, it can be difficult to act rationally and focus on the big-picture. However, one of most simple secrets of great investors is to avoid this temptation so you can achieve your overall goals.
Don’t attempt to time the market
Another one of the secrets of great investors is to avoid the temptation to sell your investments when they’re doing poorly, or buy more when something is doing well. Quite simply, it’s almost impossible to time the market correctly – when you’re buying a rising investment, you’re buying high, or selling low in the instance of a downturn (the complete opposite of successful behavior).
A wise individual realizes that one of the secrets to becoming a great investor is to realize that chasing short term gains (or avoiding loses) often ironically cements bigger loses over time.
Utilizing a financial advisor to help harness the secrets of great investors
At LexION Capital, we help our clients maintain a rational, long-term approach to investing. Based your individual risk tolerance and needs, we can craft a plan that will reach your goals worry-free. If you like to learn more about how we can help you become successful at investing, don’t hesitate to reach out today.
