Skills you need to be successful
Money Magazine Australia|September 2023
The amount of effort you are prepared to make will determine what type of investor you are
Max Riaz
Skills you need to be successful

Finding enduring success in anything in life requires a set of good habits (process), necessary skills and a winning mindset (emotional intelligence). This applies to being a successful investor.

This month’s article is inspired by Greg H, a reader who shared his view that finance skill is but a minor part of what it takes to be a good investor. My response is that it really depends on how you are investing and what you are investing in.

Certain types of investing will require you to have negligible or basic-level knowledge of finance, while in other cases you will need to be fully across the financial statements of your invested company – for in it will lie the opportunities and the material (existential) risks.

Option 1: from the top down

In “top-down” investing, only one skill is required: reading, comprehension and synthesising (or is that three?) of mainly non-financial information. This style of investing requires you to read like a champion: history, economics, politics, psychology, business, biographies, personal development. Develop your personal reference library. Read daily newspapers from across the globe. Subscribe to investment magazines. Keep on top of the economic indicators.

Behind your reading has to be a purpose. As an investor, you must have the thirst to find answers to the most basic question: “What is really going on around you and why?” Get behind it or under the hood to find answers and patterns. Take notes as you read to test your comprehension of issues, arguments and evidence.

This story is from the September 2023 edition of Money Magazine Australia.

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This story is from the September 2023 edition of Money Magazine Australia.

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