Reaching your financial goals is perhaps one of the most desirable things to do in your lifetime. These goals could be buying a house, achieving a sound retirement, paying for college, or just knowing that they have a substantial amount in their bank in case of emergency.
For years now, people have been making a sound income based off of investments, so it is a proven method to success. These habits can highly benefit you in becoming a successful investor. However, investing doesn’t come easy for everyone. If you want a high level of success with investing you have to ‘invest’ yourself into your investments. Being a successful investor doesn’t just come naturally to everybody who asks for it. The Motley Fool is a useful tool to becoming a successful investor.
Here are three great and proven habits from serious, successful and wealthy investors that may help you become successful and reach your financial goals.
Ignore volatility, stick with your original plan
Volatility in any form is enough to unsettle people and cause anxiety, but unfortunately, volatility is a part of investing. When your investment seems to be falling, it is normal to want to run. It is human nature, after all, to be worried or anxious.
But, to be a successful investor, that is not something you should do. Instead, a good investor will stand strong and allocate stocks that they can persevere with in good times and bad. For example, from 2008 to 2009, there was a financial crisis that caused stocks to crash and drop nearly 50%. While that would’ve seemed like a good time to run, it was proven that people who stuck through it actually fared better than those who opted out.
If anxiety, confusion, and distress follow after a volatile time when the stock markets drop, remind yourself that that is a perfectly normal reaction. It is highly important to stick with your investments for the long term instead of running. M1 Finance is the perfect platform for beginners investing in the stock market.
The beginning can be the hardest part of investing but with guidance from professionals, it can be one of the best choices that you will make in your life. It can be the difference between a solid retirement and a worrying one. When it comes to the volatility of it all, the rewards that you stand to gain will heavily outweigh any risks that may come into play.
Have a solid plan
Having a plan is always good, no matter what kind of plan is needed. Providing a financial plan is essential when moving towards your financial wealth as it provides you with the do’s and don’ts which in the long run can aid your investment journey significantly. Defining your goals and knowing exactly what you want is the thing that will pave your road for success.
There have been studies that show that people/families that create a strong financial plan benefit drastically compared to those who don’t. The difference between successful and unsuccessful investors can be as simple as a plan.
One other highly important thing to do is diversify your investments, people will say this is a key step to success. To diversify, all you need to do is invest in a variety of different stocks, bonds, and other assets. This helps with risk, and while it won’t completely eliminate it, it will lessen the chances significantly.
It may be easier to stick with your plan for the long-term if you have a portfolio that that has growth potential. This will make it easier to persevere in the long run. While diversification cannot guarantee you gains, it does provide an attractive and reasonable trade off between the risk and the reward.
Contrary to popular belief, not only can you invest in stocks, cash, and bonds, but also within those categories as well.
While investing can be complex, the risk is trumped by the reward that will likely come to you. As long as you stick to your plan, diversify, and ignore the volatility of the stock market, and hold a solid plan, you should see your financial goals becoming closer to fruition. If you adopt these key traits to success, you can expect great things in the near future that will aid you significantly.