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.]
Similar Articles:
- Controlling the Urge – Ask any big-name investor what it takes to make consistent money in the stock market and they’ll all…
- Too Many Witches – If you’ve spent some time in the investing world, you have probably heard the terms "triple wit…
- Learning About Charts – The value investor argues that fundamental analysis is better. The trader argues that technical anal…
- The High-Speed, Low-Cost Catalyst – Success – in all areas of life – loves speed. Time is your ally when you take action. But time is a …
- Why This Trend Trumps the Tally – What’s wrong with depending on the collective wisdom of the analysts who follow stocks day in and da…
- Take Advantage of Stocks That Lost Because of “Guilt by Association” – So far, 2009 is starting off much like 2008 ended: not good for the market. But I remain bullish abo…
- Do You Have a Killer Support System? – Susan was tired of being a professional speaker. She’d often spend 200 days a year on the road, away…