Are You Keeping Yourself From Getting Rich?

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“Why is it that people seem to plan for everything except success?”

My colleague Bill Patalon who heads up Private Briefing made that comment to me recently during one of our after-hours chats. We’ve held them almost every day for the past seven years since we started working together.

Long after the markets have closed and most of the team has gone home, “BP” and I talk about the events of the day by phone. No matter where I am in the world, I look forward to the 15 or so minutes we spend together.

Last Thursday, though, BP changed things up based on a series of notes he received from subscribers about a call I made.

Those who’d followed my advice had made out big while those who hadn’t were grousing about it. Hence his question which, truth be told, was more of an exasperated statement: Is it possible to be a successful investor over the long term?

The way I see things, it’s absolutely possible for individual investors to beat both the stock market and Wall Street.

5 Factors to Investing Success

I believe people are a product of their environment and that the most successful investors embody five key “traits” for lack of a better term.

With more than 30 years as a journalist to his credit, BP’s ears perked up and he said, That’d make a great story for our subscribers.”

So here they are…the five traits I believe will help boost your profits and keep the bears at bay.

    1. Get out of your comfort zone

    Every investor falls into a comfort zone sooner or later, whether it's because they “know” their investments or become overly familiar with certain methodologies. Sometimes this works for them but the majority of the time it works against them for one simple reason…the markets change over time.

    Really successful investors will deliberately go outside their comfort zones. They’re the ones who have stacks of magazines and books all over their homes. They read voraciously and make it a point to engage others around them in a never-ending process to learn more about the world.

    Dr. Mark Mobius, Executive Chairman of Templeton Emerging Markets Group, is perhaps the ultimate example of what I am talking about. Overseeing research in 18 global emerging markets offices, he’s always on the go and commands an almost encyclopedic knowledge of the investing landscape.

    He revels in change because it’s synonymous with opportunity.

    2. Persistence

    Average investors tend to try something once then move on. If it works, great. They’re a genius. But if it doesn’t, something must be wrong with the method or the recommendation or the source. They simply move on.

    But successful investors follow up diligently and assume personal responsibility for their efforts. If an investment doesn’t work out the way they plan, they’ll be back. They never assume that a single shot is enough…not in life and not when it comes to their money.

    Case in point…many investors are surprised to learn that professionals don’t think twice about taking 3, 4 or even 5 swings at the same investment before they settle into a position they like.

    Take Jim Rogers, for example. He is one of the most successful investors on the planet and one of the most persistent, prescient thinkers I’ve ever met. When he latches onto something, it’s rare he’ll let go.

    Yet, he’s also the first to tell you that he doesn’t know everything and doesn't hide from trades that he’s messed up over the years.

    In fact, Rogers frequently notes during interviews in a very self-deprecating manner that “he hopes he’s smart enough” to buy or sell at some point a reporter has picked out for him.

    More often than not, he is.

    3. Healthy skepticism

    If you’re like me, you get all sorts of junk mail every day touting everything from the newest six-headed singing bass I can’t live without to the miracle hair cure discovered by some company I’ve never heard of.

    What makes adverts so great is the “copy.” That’s the term for the language used to evoke a response which usually involves taking out your wallet and forking over a bunch of money. It’s a finely tuned science.

    Here’s the thing…the better you are at reading it, the easier it gets to sorting out opportunities, especially when it comes to reading about new companies in new industries.

    To do it right, you need a healthy sense of skepticism. My grandmother, Mimi, had a finely tuned radar and saw to it that I developed one too. You’ve heard me reference her before in Money Morning as the voice of investing reason.

    Mimi and I would play a game to see just how outrageous we could be whenever we learned about a new company that interested us. First, we’d review the analyst reports and company data. Then, we'd pretend to be the company’s marketing staff and make up outrageous claims.

    Our goal was to understand the transition from what’s plausible to what’s possible. When we got a match…we knew we had an investment worth consideration.

    4. Make decisions that benefit others

    All too often the modern media perpetuates the image of “lone wolves” when it comes to making money. That may work for a little while, but in reality, the most successful investors are those who understand their own limitations and seek help to overcome them, especially when doing so benefits others.

    Sir Richard Branson of Virgin is a great example of what I am talking about. Always on the go, he’s just as likely to ask you about what you do for fun as he is to engage you on the finer points of environmental management and leaving the world a better place for those who follow us in the future. I know because that’s exactly what we discussed over dinner in London years ago when we wound up seated next to each other by happenstance at Nobu (which by the way is one of my favorite places to eat).

    Sir Richard, and others like him, will often connect the dots later knowing that the cascade is a lot bigger down the line…when the results start rolling in. But thinking about others is always the beginning of the line.

    5. Freedom to fail

    Our society is hopelessly wedded to the notion of high-powered people climbing the ladder of success without a stumble. Consequently, we like to believe that the legendary investors of our time are infallible.

    Yet, if you look at who’s made it and who hasn’t, it becomes very clear that those who freely talk about their failures along the way are the truly successful ones.

    Love him or hate him, George Soros is a great example.

    He’s quick to recognize when he’s wrong and has famously acknowledged on several occasions that he’s survived because he’s capable of recognizing his mistakes.

    Most investors can’t. They’re too focused on being “right” when being profitable is the higher priority at least when it comes to long term success.

    In closing, this is by no means an exhaustive list. In fact, I’d like to hear from you with regard to what’s on your list of successful investing attributes. I’ll share the best and most unique responses in an upcoming column.

Join the conversation. Click here to jump to comments…

About the Author

Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs The Geiger Index, a reliable, emotion-free guide to making big money and avoiding losses, and Strike Force, which aims to get in, target gains, and get out clean. In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.

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  1. renee gruskin | June 20, 2013

    Reading books by economists, newsletters, watching the market and thinking about
    what is happening is probably most important. I have learned a hard lesson investing
    in a company that looked like it had everything going in the right direction with NO TRACK
    RECORD. More than 100 shallow oil wells discovered off the Brazil coastline, orders from
    Shell oil, and NO DELIVERY. Never again! It took me months to recover from the shock
    of the plunge,,,,but I am now very careful and PAYING ATTENTION.

    Study the company and it's financials and where it is going.

  2. H. Craig Bradley | June 20, 2013

    I think about the only way to make money in the markets buying quality individual stocks, as opposed to taking positions in a futures contract or options, is knowning what a "fair" price is. If you pay too much for any asset (stock, bond, real estate) then it just takes that much longer to make a profit. It could even be "dead money" for awhile if you are also unlucky in your timing. Sector rotation is constantly going on, but can individuals consistantly time their stock buys to coincide with them? I doubt it.

    Here is a good example. Our physical therapist bought shares of Yanzhou Coal Mining Company last Summer at about $15.00/share, down from its 52 week high. Now YZC is down some more, currently priced at $7.81 share. So, the stock would have to double from here to make ANY money. Its dead money until it does, except for its dividend. He maintains China will be growing strong again in 5 years. Well, he missed his chance to really profit by paying too much. I can not address whether this Chinese company is a "quality" company or not.

  3. James Coburn | June 21, 2013

    Keith, I am one of those who is keeping himself from getting rich or even making money. I have $2000 in a Scottrade account, haven't invested any of it, am studying about stocks and want to know if you were in my position how would you proceed. I am 72 years old and self-employed.

  4. Stu Slimp | June 21, 2013

    Very good suggestions, Keith, and others.

    I would like to add that we all have some comfort zone we need to find. For instance, I have tried day trading. It stressed me tremendously. I will not try to force that into my comfort zone. I tend to avoid trades if I need to make it the same day I learn about it. Of course, there are many exceptions, like companies that have already had on my radar for a while and concerning which I have already done due diligence. My personal trading philosophy is to stay calm and not rush into a trade.

    I would also like to say that there will always be many more great investment opportunities than you can ever make. You're going to miss some, and that's ok. Get in when everything looks good.

  5. enthusceptic | June 22, 2013

    I think Mr Buffett hast the best rule: Don´t get into stuff you don´t understand. He also thinks airlines are useless for investing. Somebody else has said that insurance companies are always inventing new ways to lose money.
    I stay away from consumer related stocks, including car companies. Energy, commodities and emerging markets are my specialties.
    By all means, somebody else again has said, invest in industries you have worked in or something you know, including car companies and airlines. Transporting people is incredibly capital and labour intensive, making it difficult to make a profit. I have driven a taxi for 8 years, so I know something about people transport.
    This is getting rather long…please set us straight on what we got wrong.

  6. Erv Dodrill | July 6, 2013

    Whatever happened to the historical gold to silver ratio of 16–(today at a whopping 64 )
    Should we b e in or out —-buy now ?? on one or both—-//
    I hear lots of different stories on what is going on——how do we know what is the true story—and the way to go ????

  7. Tom Schultz | July 6, 2013

    I just joined and started receiving information from your site. Could you please explain 50-40-10 , I have not received your book yet.

    tom schultz

  8. leonflynn | July 12, 2013

    I am ww2 vet. and do not understand a lot about investing things like how 6 banks could cause gold to drop so drastic ,makes me wonder about could happen with my investments ,i really like keith and appreciate him so far he has been on the ball

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