Good investors are not known by the considerable amounts that they have to invest or the secret shares they know to select. Good investors design an investment strategy that works for them, and they do their best to stick to it irrespective of what life brings their way.
An ordinary investor spends his money and invests the rest. A good investor invests his money and spends the rest. Investing is a risk vs returns challenge. While some investors have made millions, many have lost as well. In the share market, several individuals think that being a good investor takes some kind of secret knowledge about the share market or extraordinary intelligence when it comes to selecting stocks. But anyone can be a good investor if they follow a few simple steps.
A good investor will always have a clear goal, and it is essential to have a strategy to accomplish goals. Deviations in plans are most likely to distract an investor from their goals. A clear plan of action within a particular well-defined period for a specific return on investment indicates a good investor. They are always ready for the uncertainty of the market, and at the same time, the plans are generally made considering both sides.
Also, using the time to the best, a good investor also possesses knowledge or awareness of the market. They know their financial position and have a well analysed investment strategy and philosophy. A good investor needs to be informed of where his money is being utilised. A good investor also evaluates the company's growth pattern over time from genuine sources. On the accounts of the expectations and information, a good investor will always have a clear strategy for exit points as well.
Patience is another characteristic of a good investor besides goal setting and knowledge. Over a period of time, a good investor makes money due to his patience. It is possibly the best characteristic to have. A good investor has confidence in his strategies. They generally do not feel wrong about the 10% decline in the share price; they would rather sit tight to celebrate the 100% increase in the share price. They are determined to stick to the plans. They generally do not get into the buy-and-sell trends.
A good investor should also be risk-averse and understand the risk involved in investing. They know their plans and evaluate their projected returns. Being risk averse is a quality designed by experience, knowledge, and confidence over the above-mentioned significant qualities.