It’s healthy to cultivate good habits.
More so when it comes to investing, as it can help you to slowly grow your wealth to better prepare for your retirement.
Here are another four more winning habits that are taken from the best-selling book “The Winning Investment Habits of Warren Buffett and George Soros” by Mark Tier.
9. Actively searches for investment ideas
As an investor, you should be on a constant search for new investment ideas.
There are two benefits to doing this.
First, such a process enables you to assess new opportunities and compare it against existing ones.
Should there be a case where the new investment opportunity trumps an existing position, you have the option to make a switch.
This could be one way to maximise your investment portfolio’s performance.
Second, the search process also helps to sharpen your focus and keeps your mind active.
Through an active search for information, you enhance your knowledge by keeping abreast of the latest news, trends and business happenings.
10. Patience to wait for the right investment
Novice investors tend to lose patience easily and feel that they need to be doing “something” all the time.
With this attitude, the impatient investor ends up buying investments that may not fulfil his or her criteria.
A smarter method is to remain patient and wait for the right opportunities to come along.
Doing so may entail long periods of waiting and doing nothing at all.
Your behaviour is important to ensure that you adhere to a strict set of investment criteria.
11. Acts swiftly once a decision has been made
When the right opportunity comes along, you should not hesitate and immediately pounce.
You have to learn to be decisive.
Less experienced investors may display uncertainty and hold back from pulling the trigger.
The nature of stock markets is such that indecisiveness may result in missed opportunities.
If you wait too long, the moment to buy or sell may have already passed you by.
12. Holds a winning investment until it triggers a reason to exit
You should continually check and re-check your investment thesis to assess if the reason for owning an investment continues to be valid.
Ideally, you should write down a list of predetermined reasons to exit the investment.
These could be based either on valuation metrics (i.e. the stock gets too expensive) or deterioration in business fundamentals.
In other words, the decision to sell is not based on flimsy reasons or emotions but is rooted in objective and factual data.
This could be the fastest way to jump from a “newbie” investor to a seasoned pro. Our beginner’s guide shows everything you need to know to buy your first stock and beyond. Click here to download it for free today.
Disclaimer: Royston Yang does not own any of the companies mentioned.