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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Are You Preventing Yourself From Getting Rich?

InvestorEducation / Learning to Invest Jun 20, 2013 - 03:28 PM GMT

By: Money_Morning

InvestorEducation

Keith Fitz-Gerald writes: "Why is it that people seem to plan for everything except success?"

My colleague Bill Patalon who heads up Private Briefing made that comment to me recently during one of our after-hours chats. We've held them almost every day for the past 7 years since we started working together.

Long after the markets have closed and most of the team has gone home, "BP" and I talk about the events of the day by phone. No matter where I am in the world, I look forward to the 15 or so minutes we spend together.


Last Thursday, though, BP changed things up based on a series of notes he received from subscribers about a call I made.

Those who'd followed my advice had made out big while those who hadn't were grousing about it. Hence his question which, truth be told, was more of an exasperated statement: Is it possible to be a successful investor over the long term?

The way I see things, it's absolutely possible for individual investors to beat both the stock market and Wall Street.

5 Factors to Investing Success

I believe people are a product of their environment and that the most successful investors embody five key "traits" for lack of a better term.

With more than 30 years as a journalist to his credit, BP's ears perked up and he said, "that'd make a great story for our subscribers."

So here they are...the 5 traits I believe will help boost your profits and keep the bears at bay.

1) Get out of your comfort zone

Every investor falls into a comfort zone sooner or later, whether it's because they "know" their investments or become overly familiar with certain methodologies. Sometimes this works for them but the majority of the time it works against them for one simple reason...the markets change over time.

Really successful investors will deliberately go outside their comfort zones. They're the ones who have stacks of magazines and books all over their homes. They read voraciously and make it a point to engage others around them in a never-ending process to learn more about the world.

They embrace change.

2) Persistence

Average investors tend to try something once then move on. If it works, great. They're a genius. But if it doesn't, something must be wrong with the method or the recommendation or the source. They simply move on.

But successful investors follow up diligently and assume personal responsibility for their efforts. If an investment doesn't work out the way they plan, they'll be back. They never assume that a single shot is enough...not in life and not when it comes to their money.

Case in point...many investors are surprised to learn that professionals don't think twice about taking 3, 4 or even 5 swings at the same investment before they settle into a position they like.

3) Healthy skepticism

If you're like me, you get all sorts of junk mail every day touting everything from the newest six-headed singing bass I can't live without to the miracle hair cure discovered by some company I've never heard of.

What makes adverts so great is the "copy." That's the term for the language used to evoke a response which usually involves taking out your wallet and forking over a bunch of money. It's a finely tuned science.

Here's the thing...the better you are at reading it, the easier it gets to sorting out opportunities, especially when it comes to reading about new companies in new industries.

To do it right, you need a healthy sense of skepticism. My grandmother, Mimi, had a finely tuned radar and saw to it that I developed one too. You've heard me reference her before in Money Morning as the voice of investing reason.

Mimi and I would play a game to see just how outrageous we could be whenever we learned about a new company that interested us. First, we'd review the analyst reports and company data. Then, we'd pretend to be the company's marketing staff and make up outrageous claims.

Our goal was to understand the transition from what's plausible to what's possible. When we got a match...we knew we had an investment worth considering.

4) Work with others for mutual benefit

The modern media perpetuates the image of "lone wolves." In reality, the most successful investors are those who understand their own limitations and seek help to overcome them.

Specifically, what I'm talking about is the willingness to engage other people who may form a part of the successful decision making model they'll use to achieve wealth.

Sir Richard Branson of Virgin is a great example of what I am talking about. Always on the go, he's just as likely to ask you about what you do for fun as he is to engage you on the finer points of environmental management. I know because that's exactly what he asked me at dinner in London years ago when we wound up seated next to each other by happenstance.

As one of the most successful investors in the world, you'd think Sir Richard would be focused on making his Virgin brand even more powerful. In reality, he's more interested in empowering others.

Sir Richard will often connect the dots later knowing that the cascade is a lot bigger down the line...when the results start rolling in.

5) Freedom to fail

Our society is hopelessly wedded to the notion of high-powered people climbing the ladder of success without a stumble. Consequently, we like to believe that the legendary investors of our time are infallible.

Yet, if you look at who's made it and who hasn't, it becomes very clear that those who freely talk about their failures along the way are the truly successful ones.

Take Jim Rogers, for example. He is one of the most successful investors on the planet. He's also the first to tell you that he doesn't know everything and doesn't hide from trades that he's messed up over the years.

Despite being one of the world's most successful investors, he'll frequently note during interviews in a very self-deprecating manner that "he hopes he's smart enough" to buy or sell at some point a reporter has picked out for him.

More often than not, he is.

In closing, this is by no means an exhaustive list. In fact, I'd like to hear from you with regard to what's on your list of successful investing attributes. I'll share the best and most unique responses in an upcoming column.

Source :http://moneymorning.com/2013/06/20/are-you-keeping-yourself-from-getting-rich/

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Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

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