{"id":1256,"date":"2020-08-08T13:25:04","date_gmt":"2020-08-08T13:25:04","guid":{"rendered":"http:\/\/www.assetmultiplier.co.in\/blog\/?p=1256"},"modified":"2020-08-08T13:25:04","modified_gmt":"2020-08-08T13:25:04","slug":"think-like-a-winner","status":"publish","type":"post","link":"https:\/\/www.assetmultiplier.co.in\/blog\/2020\/08\/08\/think-like-a-winner\/","title":{"rendered":"Think Like a Winner"},"content":{"rendered":"

As an individual investor, what\u2019s the key to success? It\u2019s a question Adam Grossman hears a lot, especially in volatile times like this. The answer, he thinks, is that there isn\u2019t just one key, but rather five. The most successful investors seem to be equal parts optimist, pessimist, analyst, economist and psychologist. Together, he calls these the five minds of the investor. If you can develop and balance all five, that\u2014Grossman believes\u2014is the key to investment success.<\/p>\n

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  1. Optimist. <\/strong>When Grossman thinks of financial optimists, he immediately thinks of Warren Buffett. Now, you might imagine that it\u2019s easy to be an optimist when you\u2019re a billionaire. But he thinks it\u2019s because\u00a0<\/em>Buffett is an optimist that he\u2019s a billionaire. His secret\u2014which really isn\u2019t such a secret\u2014is to bet on the\u00a0long-<\/a>term growth\u00a0of the stock market. When the economy is in a recession, as it is today, with millions out of work, it\u2019s easy to feel dispirited. It is scary, and I don\u2019t want to diminish everything that\u2019s going on. But as Buffett wrote in that 2008 article, \u201cFears regarding the long-term prosperity of the nation\u2019s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.\u201d Of course, you can\u2019t have 100% of your money in stocks. That brings us to the role of the pessimist.<\/li>\n
  2. Pessimist. <\/strong>Many people view themselves as either a glass-half-full or glass-half-empty kind of person. But for investment success, he thinks you want to be a little of each. You\u2019ll notice that Buffett referred to the stock market\u2019s long-term potential<\/em>. That\u2019s an important qualification. As we\u2019ve seen this year, things can\u2014and do\u2014happen that interrupt the market\u2019s growth. That\u2019s why it\u2019s important to pay as much attention to your inner pessimist as to the optimist. What\u2019s the best way to accomplish that? It isn\u2019t complicated: You just want to keep enough of your assets\u00a0outside\u00a0of stocks to help you\u00a0weather<\/a>\u00a0these interruptions. That will give you both the financial ability and the mental fortitude to get through tough times.<\/li>\n
  3. Analyst. <\/strong>If the optimist believes that stocks will grow over time, and the pessimist knows that they can\u2019t grow all the<\/i> time, how do you balance the two? That\u2019s where the analyst comes in. The role of the analyst is that of a mediator\u2014to consider the needs of both the optimist and the pessimist. Your inner analyst should be dispassionate, focusing on the facts of your individual situation. This includes your income, expenses, assets, liabilities and goals. In short, the analyst\u2019s job is to strike the right balance between optimism and pessimism to develop an investment\u00a0strategy<\/a>\u00a0that\u2019s the best fit for you.<\/li>\n
  4. Economist. <\/strong>Economics isn\u2019t exactly a scientific field and anyone\u2019s ability to forecast the future is necessarily limited. But successful investing does incorporate certain economic concepts. At a high level, these include fiscal policy (the government\u2019s ability to set tax rates and spending levels) and monetary policy (the Central Bank\u2019s ability to set interest rates). And finally, it includes a sense of economic history and financial cycles. None of this means you\u2019ll be able to predict where the economy is going. None of us can. But it does mean you\u2019ll be better equipped to respond to events as they occur.<\/li>\n
  5. Psychologist. <\/strong>Colourful commentary and dramatic predictions are all around us. That\u2019s why the fifth, and maybe most important, ingredient for investment success is to channel your inner psychologist. Among other things, this will help you to understand the\u00a0motivations\u2014both conscious and unconscious\u2014of others, and to see the subtext of what they\u2019re saying and not saying. This will help you to tune them out, as needed, so you can stick to your plan.<\/li>\n<\/ol>\n

    Is investing easy? No, he doesn\u2019t think anyone would (truthfully) claim that. But if you successfully balance these five ideas in your mind, Grossman believes you\u2019ll tilt the odds in your favour.<\/p>\n","protected":false},"excerpt":{"rendered":"

    As an individual investor, what\u2019s the key to success? It\u2019s a question Adam Grossman hears a lot, especially in volatile times like this. The answer, he thinks, is that there isn\u2019t just one key, but rather five. The most successful investors seem to be equal parts optimist, pessimist, analyst, economist and psychologist. Together, he calls […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[74],"tags":[],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1256"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=1256"}],"version-history":[{"count":1,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1256\/revisions"}],"predecessor-version":[{"id":1257,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1256\/revisions\/1257"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=1256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=1256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=1256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}