Time for a thread 🧵
These 10 rare habits will help you outperform 98% of investors:
These 10 rare habits will help you outperform 98% of investors:
1. Be patient.
“Be fearful when others are greedy, and greedy when others are fearful.”
Markets go up and down. Most investors follow blindly. It’s easy to get scared and sell.
The profit you make in a bull market is the reward for holding your convictions in a bear market.
“Be fearful when others are greedy, and greedy when others are fearful.”
Markets go up and down. Most investors follow blindly. It’s easy to get scared and sell.
The profit you make in a bull market is the reward for holding your convictions in a bear market.
2. Don’t chase trends.
Everyone wants to invest in the next Bitcoin or Gamestop. But you can’t do that reliably.
All bubbles burst eventually. You need to think long-term.
Hype doesn’t translate into generational wealth.
Everyone wants to invest in the next Bitcoin or Gamestop. But you can’t do that reliably.
All bubbles burst eventually. You need to think long-term.
Hype doesn’t translate into generational wealth.
3. Know your sophistication.
Are you a beginner?
Or a veteran investor?
Perhaps you’re a math genius who solves Black-Scholes on postage stamps.
For many, simple index funds and blue-chips are best.
But for the more experienced, don’t be afraid to ramp up your risk appetite.
Are you a beginner?
Or a veteran investor?
Perhaps you’re a math genius who solves Black-Scholes on postage stamps.
For many, simple index funds and blue-chips are best.
But for the more experienced, don’t be afraid to ramp up your risk appetite.
4. Have a purpose.
Why are you investing?
Are you saving for your first home?
Looking to get rich quick?
Or trying to build a portfolio to last the decades?
You can only make smart investments if you know what your goal is.
Why are you investing?
Are you saving for your first home?
Looking to get rich quick?
Or trying to build a portfolio to last the decades?
You can only make smart investments if you know what your goal is.
5. Challenge your beliefs.
All investments look genius if you ignore the risks.
When you take a position, look carefully at the difficulties that may arise.
Only buy if you understand the downsides just as well as you understand the upsides.
All investments look genius if you ignore the risks.
When you take a position, look carefully at the difficulties that may arise.
Only buy if you understand the downsides just as well as you understand the upsides.
6. Keep a forward focus.
Past performance tells you nothing.
If a company is up 1000% in five years, this could be because it’s an innovator. But this growth could be unsustainable.
Or it might just be a bubble.
Don’t get caught up on past trends. Invest for the future.
Past performance tells you nothing.
If a company is up 1000% in five years, this could be because it’s an innovator. But this growth could be unsustainable.
Or it might just be a bubble.
Don’t get caught up on past trends. Invest for the future.
7. Never buy without a price target.
It’s not enough to buy good companies. You need to buy them at the right price.
If you bought Microsoft shares in 1999, it would take 18 years to break even.
And you need the confidence to exit your positions once they reach your target.
It’s not enough to buy good companies. You need to buy them at the right price.
If you bought Microsoft shares in 1999, it would take 18 years to break even.
And you need the confidence to exit your positions once they reach your target.
8. Diversify.
Some investors make money by knowing a single industry - or even a single company - inside out.
But the risk is high. New technology or legislation could ruin your portfolio overnight.
Most are better off taking broad exposure to a range of investments.
Some investors make money by knowing a single industry - or even a single company - inside out.
But the risk is high. New technology or legislation could ruin your portfolio overnight.
Most are better off taking broad exposure to a range of investments.
9. Consider tax benefits.
Congrats - you’ve found an investment strategy that makes you money.
Now you’ve got to pay taxes.
Take advantage of tax-deferred accounts like 401(k)s and IRAs, and ETFs that are free from federal income tax.
Congrats - you’ve found an investment strategy that makes you money.
Now you’ve got to pay taxes.
Take advantage of tax-deferred accounts like 401(k)s and IRAs, and ETFs that are free from federal income tax.
10. Do your research.
A good start is learning the key statistics of your investment: P/E Ratio, EPS, ROI, Enterprise Value, etc.
Watch company earnings reports. Listen to the CEO.
Keep an eye on the industry.
And make sure you stay up to date on the global economy.
A good start is learning the key statistics of your investment: P/E Ratio, EPS, ROI, Enterprise Value, etc.
Watch company earnings reports. Listen to the CEO.
Keep an eye on the industry.
And make sure you stay up to date on the global economy.
That’s a wrap.
Want more?
Subscribe to GRIT
The #1 FREE Finance newsletter on Substack.
gritcapital.substack.com
Want more?
Subscribe to GRIT
The #1 FREE Finance newsletter on Substack.
gritcapital.substack.com
Loading suggestions...