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What Can We Learn From Successful Investors?

It’s easy to feel envious of those who’ve made a fortune through successful investing. But what can we learn from how they behave?

1 November 2021

James Paterson, a financial adviser and Head of Wealth at Pie Funds Management Ltd, explains common traits of successful investors he’s worked with over the years.

Leave your emotions at the door

One of the key ingredients of being a successful investor is controlling your temperament and mastering your emotions. Market surges and declines are mainly caused by two emotional factors: fear and greed. It’s so easy to invest based on these emotions, but successful investors have a stronger control over how they are feeling.


Patience is key. Suppose you’re working towards an investment goal that you believe will lead to significant, possibly even game-changing, gains over the long term, but there is no immediate gratification in sight. Would you be able to stick to your guns?

Building true wealth and financial security takes time, and you'll likely encounter financial challenges along the way. But viewing your finances and investments as a lifelong journey can help you remain patient and stay on course, despite the challenges you might face.

Stick to your plan

Have the ability and willingness to stick to a plan. Many of us remember 2008 and the Global Financial Crisis. After watching the headlines on the news bulletins, I drove into work preparing myself for a day of tough phone conversations with panicked and emotional investors. I couldn’t blame them because I was feeling the same way, as this was my first taste of a major market crash. It was a tough year and you wouldn’t blame investors for pulling the plug when their portfolios had fallen by 30 to 40 per cent.

Don’t follow the crowd

We all know how hard it is to ignore the herd mentality. Even though we say we won’t, most in the heat of the battle decide to sell in the face of fear. Looking back at 2008, the best investors were those who hung in and didn’t panic and withdraw, therefore crystallising their losses. Even better were those who were buying when the world was selling. It wasn’t easy, but they benefited significantly over the next few years as markets rebounded.

Learn from your mistakes

I‘ve found that successful investors learn quickly from their mistakes. They are not discouraged by these mistakes because they know mistakes are part of the process to becoming a better investor. When investors talk of experience, they talk about the trials faced, mistakes made, lessons learned, and triumphs achieved. Every successful investor will have a story or two to share about miscalculations or mistakes made. We’re all human at the end of the day.

First published 14 May, 2018

JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate. James Paterson is an Authorised Financial Adviser and a disclosure statement is available on request and free of charge at www.piefunds.co.nz.

Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.


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