The Virtuous Investor
If you want to be successful as a stock investor, you must have these three virtues:
1. Modesty. You don’t need to be the best and most successful investor in the world. If you set modest objectives - 10 percent to 15 percent - you will have a good chance of reaching them.
2. Humility. You don’t know enough to predict the future. Admit it by setting stop-loss points and sticking to them.
3. Consistency. Umpteen studies have shown that the most important factor in stock market success is the consistent application of a rational system. Which system you follow is not as important as your consistency in adhering to it.
A 10 percent to 15 percent return on your investment may not make you wealthy overnight. But if you stick to these three virtues - and don’t abandon them when you hear an irresistible story about a "can’t lose" stock - chances are you will do much better than your friends and colleagues.
[Ed. Note: The above was excerpted from Michael Masterson's New York Times best-seller Automatic Wealth for Grads ... and Anyone Else Just Starting Out.
If you know a young person who's going to graduate this year... or if one of your 2008 goals is to increase your income… pick up a copy. Learn more about this and all of Michael's books at his website.]
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