Tuesday, May 16, 2006

So what kind of investor are you ?

So what kind of an investor are you? Over the years I have noticed certain personality traits that seem to make someone a more successful as an investor. The constructive traits for investors are usually pretty obvious it’s the negative attitudes and traits that seem to really get in the way. Here are a few of those negative traits : 1) Know it alls ,these types are usually there own worst enemy ,they are smart but often are short sighted and more interested in trying to out smart everyone than make money .2) Cheap investors, these are people who are more worried about how much the fund or broker or firm makes than how much they make . They will often forgo investment action to avoid paying a commission because they don’t want anyone else to make any money, instead of thinking about what the potential return is to them selves. They will constantly get hung up over a commission or fee instead of looking at total return and fail to make the necessary moves. Investing contrary to popular belief is about making money, not about saving money. 3) The follow the crowd type, these are people that base there investment decisions on social status and weather one of there friends or relatives is buying the same investment. These folks are very susceptible to hot tips and rarely listen to sound investment advice. They will often buy the hot stock of the moment never wanting to be left out.4) The procrastinator, these are people who are always looking for that perfect time to make their move ,not realizing that investing is often more about time in the market not timing the market. 5) The no follow through type, these are people that make lots of sensible investment plans but never follow through or they start and have very unrealistic expectations as to their results and how quickly they are going to see any return. They will often get discouraged easily and drop there plans only to restart with new plans at a later date. 6) Investors that lack the understanding that stocks that go up the fastest are also stocks that also go down the fastest. It is important to recognize what you’re getting yourself into because as in life it is often easier to get into things than get out of them and the risk of buying a particular stock has little or nothing to do with the performance of that stock. 7) Envy, these are investors that get annoyed with the success of others. Instead of trying to emulate other successful investors they will reject all the steps of proper investing and continual practice unsound investing .Each failure only feeds on it self and strengthens their resolve. The qualities that seem to work best are patients, persistence, making a plan and sticking to it ,that means having follow through .In the long run for most of us a long term well executed plan outweighs most stock trading brilliance and it is the time in the market out weighs timing the market.


James
www.jamesfoytlin.com

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