All investors have one common goal – get better returns or performance out of their portfolio. While not all investors can be successful, all successful investors do display some characteristics which can be followed by other investors. Mind you, these characteristics are easier said than followed.
Here , we will talk about the most common characteristics and approaches to be successful at investing.
- Set realistic goals and investment objectives: Having a fair and reasonable expectation from your investment is the first thing that investors should learn about. The investment objective should be aligned to the investment asset class, risk appetite and your expectations from the portfolio. Having the right expectations from your advisor is also an important element of successful investing for investors
- Be disciplined and patient: As investors, we should understand that not doing anything in the markets also counts as a decision or strategy. Discipline in your investment approach or strategy is another key success factor. If you are investing in a disciplined fashion, market movement and levels will no longer be important for you over time.
- Look at diversification and asset allocation : Diversification and asset allocation are a couple of investment strategies which have proved themselves to be indispensable to the investors. Having the right asset allocation on your total portfolio is perhaps the most critical factor for deciding your portfolio performance.
- Minimise the number and intensity of your mistakes : While some of your investment decisions will surely help you reap good returns, it is often the mistakes that you make that destroy your returns. A good investment portfolio in quality mutual fund schemes will definitely help you create wealth. By rule, know that any investment “guaranteeing” high returns is too good to be true and is not possible in the market. If you want high returns with risk, equities should be your go-to asset class.
- Know your expertise and your limits : If you are not so good at identifying stocks, leave that work to the fund managers, don’t try to become one. The idea is not to stretch ourselves and try to become experts at everything. Managing wealth or money requires a certain amount of time, knowledge, efforts, market awareness, product familiarity and freedom from personal bias.
- Be responsible : Being responsible for your investments would mean a certain level of seriousness and commitment to your financial plans and investment strategies. It would also mean that you value your money and would not take undue risks or decisions which are not in line with your stated objectives or contrary to the advice from your advisor.