What Makes a Good Investor?

Join Claire Hollander, a Wealth Advisor at Liberty Group, as she discusses the essential strategies and skills needed to become a knowledgeable investor. This video is your guide to exploring the art of investing. Discover the fundamental principles of investing in stocks, bonds, mutual funds, and real estate, and learn how to navigate the risks and rewards that come with each.

Do you know what strategies and skills are necessary to make you a good investor?
Investing is a powerful tool for growing your wealth over time. But it can also be quite daunting, especially with all the uncertainties in the world and economy. So, let’s break it down and discover the key skills, strategies, and attitudes you need to become a savvy investor.

First things first, let’s understand the fundamentals.

Investing is all about putting your money into assets that have the potential to grow over time, like stocks, bonds, mutual funds, or real estate. The goal? To generate returns on your initial investment and watch your wealth grow. But remember, investing comes with risks, and the value of your investments can fluctuate with market conditions. To become a skilled investor, you must grasp the basics. That means knowing your asset classes, risks, rewards and different investment strategies. Have you ever wondered about the differences between index funds and mutual funds? What are the cyclical and defensive stocks? It’s crucial to be well informed. You can learn from books, articles, classes, or even podcasts from reputable sources.

Once you’ve got the basics down, it’s time to make a comprehensive plan.

A comprehensive financial plan is a roadmap to becoming a successful investor. This plan should include your financial goals, your risk tolerance and the best asset allocation for your investments. Diversification is key. So spread your funds across various asset classes and investment vehicles. Your plan should have a timeline for when to invest and when to rebalance your portfolio. Also, you should know which strategy to employ, whether it is a buy and hold strategy, index funds, income investing, and/or dollar cost averaging.

Now, here’s where patience and discipline come into play.

Markets are unpredictable, and returns are not guaranteed. When markets take a dive, some people panic and sell all of their investments at a loss. But staying invested—even during volatility—might be your best bet in the long run. And just look at the financial crisis of 2008 and 2009. Those who stayed invested came out far better than those who fled. Patience is key. Building wealth takes time. And investing is a marathon not a sprint. Successful investors usually don’t get caught up in short-term fluctuations, or let emotions drive their decisions. They stick to a well thought out plan.

Your investments aren’t a set it and forget it deal.

The world is consistently changing, and threats like wars, pandemics, or policy changes can impact your investments. Monitoring is essential. But be mindful of checking too often, which can lead to anxiety. Checking your account statements and evaluating how your investments compared to benchmarks are great ways to keep tabs on your portfolio.

Finally, don’t hesitate to seek professional advice.

Investing can be complex, and a financial advisor or investment manager can help educate you on the finer details, provide unbiased opinions, and guide you through various investment options and strategies. It’s always a good idea to have someone experienced and knowledgeable in your corner.

If you need advice, we at Liberty group are happy to help, click here to schedule an appointment. So, is successful investing possible for anyone? Absolutely. With the right knowledge, plan, patience, monitoring, and advice, everyone has the potential to be a good investor.