Compare The Platform: 7 habits of a successful investor

Home/Blog/7 habits of a successful investor

7 habits of a successful investor

While investing can be complex, the most important habits are simple to follow and will make it easy to achieve your longer-term financial goals.

1. Focus on what you can control, not what you can’t.

No one can consistently predict where the financial markets are heading, so don’t waste your time trying. Instead, get clear on your goals, develop a plan and stick with it. Are you saving for your first home or planning for an early retirement? Work out what money you’ll need, by when and develop a plan to get you there. Spend less than you earn and create a safety net for the unexpected (ideally three to six months of expenditure), so you have money to fall back on should you need it.

2. Think longer term.

As tempting as it may be, don’t focus on the day-to-day fluctuations of the stock market. Over the last 200 years, despite ups and downs, the stock market has been the best place for the longer-term investor to build their wealth.

3. Do NOT trust your instincts.

While this goes against much of what you’re taught emotions are enemy number one. Rationally we may want to buy low and sell high, but our emotions may lead us to sell when markets tumble and buy when they rise.  When fear and greed kick in, we can end up doing exactly the wrong thing at the wrong time.

4. Don’t let your cash stash get too big.

Carrying cash for emergencies and shorter-term needs makes sense. However, cash can be a poor investment over the longer-term as inflation erodes away its purchasing power, particularly in low-interest rate environments.

5. Keep an eye on your fees.

Whatever investment product you chose, shop around for low fees. Remember: the higher the fees, the higher your investment returns need to be to cover them.

6. Save.

Savings are freedom and security. Whether it’s for a new car, a holiday, a new house, your retirement or an emergency – having money saved (and invested) gives you more financial freedom.

7. Don’t put off till tomorrow what you can do today.

Whatever you’re planning towards, start now. You’ll feel better and crucially will benefit from compound returns. Invest £1,000 aged 35 at 9.46%* and you’d have £6,097 when you’re 55. Start ten years earlier and you’d have £15,054 – almost twice as much (past performance is not a guarantee of future performance but the longer you are invested the better).

The bottom line: develop these simple traits today and you’re on track to meet your financial goals.

Comparetheplatform is a price comparison service that aims to take the hassle out of selecting an investment platform. On our website, you can enter a few short details about yourself and our tools and calculators can help you to decide which investment platform is right for you.


Photo by GR Stocks on Unsplash

*Based on FTSE All-World Total Return GBP.

2021-09-09T12:11:27+01:0009/09/2021|

About the Author:

Bella has 20 years’ experience in the research and analysis of the investment industry. She set up Fundscape (comparetheplatform's owner) in 2010. Before Fundscape, she worked for Thomson Reuters as Global Head of Research and Publications (Lipper) and was the author of numerous publications and reports. Bella has a master’s degree in International Business and is fluent in four languages. She is particularly fussy about grammar and punctuation, and loves going to the theatre, disco dancing and pub quizzes. @bella_caridade @fundscapeuk

Comments are closed.