The 5 Traits Of The World’s Most Successful Investors

Here are the five key traits of the world’s most successful investors.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Every investor sets out with the goal of trying to beat the market. A few even dare to think that they can become next Warren Buffett. Unfortunately, the harsh reality is that few manage to even come close to this goal.

Nevertheless, you can improve your chances of success. There’s no sure-fire strategy to riches, but by studying the world’s most successful investors we can pick up a few tips to help improve our chances. 

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

1. Have a strategy

Arguably the most important trait of the world’s greatest investors is the ability to set out with, and stick to, a clear strategy. 

It doesn’t matter which approach you choose, whether it be growth, value, income, deep value, distressed investing, momentum investing or day trading, whichever route you go down, it is key that you stick with the strategy. 

Almost all of the world’s most successful investors, the like of Peter Lynch, Warren Buffett, John Templeton, Neil Woodford and Charlie Munger have all stuck with one strategy throughout both the good times and the bad. 

2. Never stop learning 

“If you stop learning, the world rushes right by you.” — Charlie Munger

Charlie Munger, Warren Buffett’s right-hand man, is arguably one of the most influential investors of all time. It’s his philosophy that investors should never stop learning, and they should always seek to improve existing skills.

Research has shown that for anyone to truly become an expert at something, it takes 10,000 hours of practice. The only way to reach this goal is to continually seek out new information. 

Charlie and Warren always read for several hours each day to increase what Charlie has called their “worldly wisdom”. 

3. Ask what could go wrong, not what could go right

Most investors invest with the wrong frame of mind. Indeed, when assessing an investment, most will as “what’s the upside here?” or “how much can I make?” 

But in most cases, investors should constantly be asking “how much can I lose?” 

This is the advice of the world’s most prominent hedge fund manager, Ray Dalio. Overseeing $170bn of client money, Ray Dalio’s fund Bridgewater has only lost money in three of the past 30 years — an unbeaten record. 

Dalio attributes his success to the fact that he’s terrible at making decisions. He’s always looking for someone to shoot a hole in his theses and tell him that he is wrong. Being overconfident in this business can cost you a lot of money. 

4. Know your strengths

Everyone has their own strengths, and weakness. Each investor has a company or sector that understand more than most. 

It’s important that you invest inside your circle of competence. There’s no faster way to lose money than investing in something you don’t understand. If you can’t figure out what a company does or how it makes money, it’s often best to stay away, no matter how lucrative the opportunity might be. 

5. Admit your mistakes 

At one point in time, every investor has made a mistake. It’s just part of the business. The best way to act on a mistake it to accept it, learn from the mistake and move on. 

“There’s no way that you can live an adequate life without many mistakes.  In fact, one trick in life is to get so you can handle mistakes. Failure to handle psychological denial is a common way for people to go broke.”  — Charlie Munger

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

These 2 cheap shares dived last week. I’d buy 1 today

Although global stock markets rebounded hard this week, these two cheap shares were left behind in this surge. But I…

Read more »

Female friends enjoying their dessert together at a mall
Investing Articles

Down 40% in 2022, should I buy this 6.3% yield for my Stocks and Shares ISA?

Royal Mail shares have sold off aggressively due to lower parcel volumes and higher-than-expected inflation. Time to add them to…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

3 cheap shares with dividend yields of up to 9%

These three cheap FTSE 250 shares all offer market-thrashing dividend yields of up to 8.7% a year. But which would…

Read more »

Twenty pound notes in back pocket of jeans
Investing Articles

3 passive income ideas I’m using today

Our writer shares three passive income ideas he's already using. They're dividend shares -- and he'd consider buying more of…

Read more »

Close-up of British bank notes
Investing Articles

Is now a good time to buy dividend shares?

As economic pressures increase, concerns are growing over dividend shares. Here's why I think it's right to buy now, not…

Read more »

Middle age senior woman sitting at the table at home working using computer laptop clueless and confused expression with arms and hands raised.
Investing Articles

Is now a good time to buy UK stocks?

Markets remain volatile but this Fool doesn't care. He's busy buying great UK stocks on the cheap.

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

A top-quality growth stock to buy on the dip

Growth stocks have sunk this year, with inflationary pressures being the primary reason. Here's one that looks unfairly beaten-down.

Read more »

Gold bullion on a chart
Investing Articles

How I’m protecting my portfolio from a stock market crash in 2022

I am investing in this asset class to protect my portfolio from high inflation, slower growth, or a stock market…

Read more »