4 Traits Successful Stock Traders Possess

4 Traits Successful Stock Traders Possess

In the academic world, students with higher IQs can outperform their peers. But in the stock market, having a high IQ isn’t a ticket to success.

The likes of Warren Buffet aren’t as intelligent as Albert Einstein. Yet, they have managed to excel in stock trading all these years. The reason these stock traders have been successful is the traits they possess. Keep reading to learn more.

1. Self-control

A bunch of MBA students had the opportunity to question warren Buffet during a meeting. They wanted to know why only a handful of investors have successfully replicated his investing success.

Buffet’s answer was “temperament.” It’s not easy to make investing fortunes without self-control.

No doubt, the stock market has its good and bad days. One bad news and traders start running helter-skelter. They start selling off their shares to avoid losing a large chunk of their investments.

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Buffet’s key investor trait, as it seems, is self-control. Investors need to learn to stay calm and ignore the noises. Even when the stock market is in its lowest ebb, hang on.

2. Research 

Research is a key factor in stock investing. It can be the difference between a successful and unsuccessful investor.

Even if you have to listen to analysts’ projects and reports, you still need to do your homework. Remember, it’s your hard-earned money, so you need to make wise investment decisions.

The main aim of your research should be to uncover the long-term value of a company. The company’s current stock value doesn’t have to be the most attractive.

One of Buffet’s investing styles is to never put money in a business you can’t understand. It’s a risk no serious investor should take.

Your research should involve checking the company’s annual financial report. Furthermore, observe insiders’ activities, such as the directors and senior managers. Are they buying the company’s stock? If they’re, then that could be a positive sign.

You can also listen to conference calls and reading other reports about your targeted companies.

After you have done all these, you can now consider the stock price. At this point, you’re convinced that investing in the company is worthwhile.

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3. Creating Realistic Expectations 

There’s nothing wrong with dreaming big. The problem is setting financial goals based on unrealistic assumptions. You aren’t doing yourself any good by this.

During the bull period, some stocks have recorded 50 percent returns. However, this doesn’t happen all the time. Even experienced investors know getting such returns is pure luck.

According to Warren Buffet, getting over 12 percent in stock is nothing but luck. So, please don’t get your hopes high when it comes to stock investment.

Do your research and assess that you are prepared not only with diligence, but also with the right tools. You will hopefully encounter capital gains, but might just as easily accrue capital losses. TurboTax Premier can help you handle each of these impacts when you file taxes for the year.

Set realistic expectations for your investments. That’s one of the traits of successful investors.

4. Invest The Surplus Funds

Your family or benefactors should never be left in anguish because you invested in the stock market. No one would applaud you for this.

A wise approach in stock investing is to invest your surpluses. That is money you are comfortable losing.

But that doesn’t mean you’ll lose money investing in the stock market. You can make massive gains in just a couple of months or years.

What this simply means is that you should only invest an amount you can afford to lose. And it’s best when it’s from your surpluses.

Successful investors aren’t the most intelligent people. What make them successful are the traits and strategies they have. You can also become a successful investor by making a few key changes to your strategies and traits.

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