Finding enduring success in anything in life requires a set of good habits (process), necessary skills and a winning mindset (emotional intelligence). This applies to being a successful investor.
This month’s article is inspired by Greg H, a reader who shared his view that finance skill is but a minor part of what it takes to be a good investor. My response is that it really depends on how you are investing and what you are investing in.
Certain types of investing will require you to have negligible or basic-level knowledge of finance, while in other cases you will need to be fully across the financial statements of your invested company – for in it will lie the opportunities and the material (existential) risks.
Option 1: from the top down
In “top-down” investing, only one skill is required: reading, comprehension and synthesising (or is that three?) of mainly non-financial information. This style of investing requires you to read like a champion: history, economics, politics, psychology, business, biographies, personal development. Develop your personal reference library. Read daily newspapers from across the globe. Subscribe to investment magazines. Keep on top of the economic indicators.
Behind your reading has to be a purpose. As an investor, you must have the thirst to find answers to the most basic question: “What is really going on around you and why?” Get behind it or under the hood to find answers and patterns. Take notes as you read to test your comprehension of issues, arguments and evidence.
Esta historia es de la edición September 2023 de Money Magazine Australia.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 8500 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición September 2023 de Money Magazine Australia.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 8500 revistas y periódicos.
Ya eres suscriptor? Conectar
Is the public market shrinking?
Australia needs a healthy stock market to give companies access to funds and to allow retail investors to build wealth.
India: three steps to transformation
Massive investment and extensive reforms turbocharge the economy.
The ballet of business
Changing direction, products, models and marketing is a hard task for a business. We chart what it takes to turn a business around, plus profile four successful pivots.
Save money and the planet
Could the high cost of living give us the incentive we need to reduce how much water and energy we use or waste? These eco-friendly household tips will help you do just that.
AI adoption is the new black
Artificial intelligence is set to reshape the commercial world, and small enterprises can’t afford to miss the boat.
Spam attack! Murky laws jam our inboxes
Unwanted marketing material is one of the pain points of modern life.
From rags to riches in style
Rich Tran sported a bowl cut until he was 14 years old and had no intention of becoming a hairdresser.
New work deals are killing the 'old' office
The Covid pandemic and the subsequent lockdowns accelerated the trend to more people working from home. It was a mixed experience.
Points taken: the truth about rewards
Can hopping between credit cards really boost your frequent flyer haul and give you cheap or free travel - or is it doing more harm than good behind the scenes? Money puts it to the test.
Shortcuts to own a home
Innovative ideas with a focus on low costs and sustainability could help solve the housing crunch.