Five Qualities that Make a Great Investor

Five Qualities that Make a Great Investor

There is a subtle but significant difference between an investor and an entrepreneur.

Although the two may overlap in some aspects, from a big-picture perspective, entrepreneurs bring business ideas to life, while investors are more focused on the qualitative side of the business.

While entrepreneurs put in hard work and passion into cultivating business ventures, investors let their money and influence do the work for them.

In many ways, investors and entrepreneurs work hand in hand in building businesses and brands; the entrepreneur brings in the muscle, and the investor funds the efforts.

It’s a win-win situation for both the investor and business owner.

Being an investor is a much safer and less demanding way of getting involved in business and making a lot of money in the process.

In most cases, investors only have put in their money in already existing businesses and start ripping the benefits almost immediately.

This is probably one of the main reasons why many business-minded people are continually drawn to investment opportunities.

However, to become an investor, you need to possess the right temperament.

Looking at some of the world’s most successful investors, such as Mark Stevens and many others, you can probably spot some of the unique quality attributed to their success.

Here are some of the essential qualities that make a successful investor.

Proactive Learner

Highly successful investors are always learning to find new ways to make money through careful and well-informed investment opportunities.

The business landscape and market dynamics change from time to time, and so do investment opportunities and strategies.

In a not so distant past, investment opportunities were limited to mainstream ventures such as real estate, banking, minerals and oil, insurance, and the stock market.

Nowadays, newer and more lucrative investment ideas have started to emerge, some of which include capital investments, cryptocurrency, and modern businesses in the digital and internet space.

A keen investor needs to learn about changing landscapes and find out where the new money is. Learning, however, is not just about acquiring knowledge; it’s also about unlearning old ways and thoughts.

High Emotional Control

It’s never a good idea to combine business with emotions.

Fear and greed are two of the main emotions that successful investors are able to control.

Investors know that business decisions guided by sentiment and irrational judgment are likely to fail.

They rely on cold hard facts in making critical decisions, from buying and selling to opting out.

Successful investors often demonstrate a strong emotional handle even when presented with exciting or depressing news.

Intense emotions, whether good or bad, may cloud your judgment and reasoning, which may result in costly ill-informed decisions.

Always Have a Plan-B

Most investors go by the philosophy of “a winning strategy must include a losing strategy.”

Investors know that there are only two sides to an investment – you can either gain or lose. The perspective of losing can be quite depressing, but it’s best to be prepared for it. Investors always have what’s called an exit strategy, plan B, or fallback plan.

An exit strategy describes what must be done if a particular investment goes south; it might be to sell out, liquidate, or dump assets depending on the situation.

Many investors don’t carry all their eggs in one basket; they diversify their investment portfolio by investing in several ventures in different niches and industries.

This means that if one investment fails, the others remain unaffected, and losses are thinly distributed.

Immense Patience

Most investment opportunities require patience and resilience.

When making investment calculations, investors always factor in the time it would take for their plans to materialize.

Some investments need time to mature and can take years or even decades to start making profits.

Some investments, such as real estate, bonds, and stocks, need to be liquidated at precisely the right time to make maximum profits.

This often means holding on to assets or investments until the moment is ripe, which can sometimes be unpredictable.

For these reasons, an investor needs to be disciplined and patient to avoid losses and rip maximum benefits.

High-Risk Tolerance

Investing can be a risky business and is not for the soft-skinned or faint-hearted. Most high-stakes businesses thrive on risks, and investing is no different.

Some investment ventures, particularly in highly volatile environments such as stocks, hedge funding, and Forex trading, often don’t even have a 50-50 winning probability – the odds are much lower.

However, fearless investors put on a heart of steel and go out for highly risky ventures.

However, smart investors don’t go out blindly; they put in place a risk management system that provides critical safety nets along the way.

High risks yield high rewards, which is maybe why risky investments offer some of the most attractive opportunities.

If you are looking to try your hand at investing, these are some of the crucial traits that you should possess.

Anyone can become an investor if they have the right mindset, discipline, and mastery of the trade.

It also helps to learn from the best, so take some time and find out what other investors in your area of interest are doing and how they make their investments worthwhile.