seven habits of highly effective investors

The world can be dealing with a pandemic of historic proportions and you get the whole market at a fire sale like there is no tomorrow. The CEO of one of the biggest private sector banks can be found engaging in unfair lending practices and the stock of the company can be found at rock bottom prices. One fine day, Maggi noodles may be found with high levels of toxins and because of that, the stock of one of the biggest FMCG companies around the world becomes available at bargain prices. You need to be able to spot the opportunities when they present themselves and jump on them because opportunities can come at any time. However, in the world of investing, being an opportunist is not only desirable but also required because it is not unfair and you are not competing with anyone. If you see an office colleague as opportunistic, the chances are you won’t have a great opinion about him or her because opportunistic people are always trying to take opportunities away from those who deserve them and that they use unfair practices. Whenever we hear of opportunists, we generally term them as negative and no one likes them. Habit 1 – Successful investors are Opportunistic and prepared So, let’s talk about the 7 habits of highly successful investors. Over the years, I have been studying successful investors and there were a few things I found similar. Then a friend of mine introduced me to the concept of value investing and goal-based financial planning.

Now, don’t just keep thinking of what you just read.I was a trader for a very long time. Applying this habit to your daily lives will also help us a lot. So that was the simplest way I could have explained the first habit that you can form to become successful in your investing careers. Take responsibility for your choices and the subsequent consequences that follow. This is what being proactive is all about. Like we took the initiative to act on others’ advice, we must take the onus for our losses. But when the stock markets fall subsequently, and our hot stocks burn a hole in our pockets, we blame them for the wrong advice. So we make a decision here to go by what these people say without putting our independent thoughts on it. Often in good times, like when stock prices are reaching the skies, we listen to the mindless advice of brokers, friends, and relatives and invest our hard earned money in ‘hot stocks about to double’. The ultimate idea is that – you have to be proactive with your investing decisions.

You have to be proactive with respect to the losses you make in your stock market investments instead of blaming anyone else for the same.

You have to be proactive about your decision to invest in stocks of large companies (low risk, low returns) or mid and small companies (high risk, high returns).

You have to be proactive about the decision regarding whether to invest in stocks, bonds, gold, property, or a mix of all.

You have to be proactive with how much you want to save and how much you want to invest (the rest stays in your bank account, earning almost nothing).

Of course you can have the advice of others, but it’s purely upon you to take the initiative – ask for the advice or think independently, and then take the investment decision. You as an investor need to take the initiative when it comes to handling your investments. Proactive, in its most root form, means taking the initiative or taking the responsibility. So let’s begin with the first habit – Be proactive. And not only that! If you are able to conduct yourself as per Covey’s guidelines with respect to your investments, you can use these habits to become a better person in your daily life as well (you must already be good, but there’s always a room for improvement J). In this small series, you will understand the habits that you as an investor can form to become highly successful in your investing career. While it’s hard to associate the fourth, fifth and sixth habits with investing, the rest are pretty important and gel well with our investing discipline. And this is true even for the way you handle your investments. These habits, if properly understood and practiced, can make you more effective and efficient in the way you handle all of life’s decisions.

Seek first to understand then to be understood.

Seven habits of highly effective investors