Strategist links personality to investment success

Font Size:

There may be no magic mathematical formula or algorithm that can ensure investment success, but, according to market strategist Michael McCarthy, “there are some personality traits that do seem to predict success”.

The chief market strategist for CMC Markets said there is no one-size-fits-all approach to investing, but, rather, a certain attitude one must have to curry favour with the money gods.

“The right investments depend on our own goals, our own needs, our own time frame, our risk appetites and a whole lot of personal characteristics,” he told nestegg.

But, he says, the personality trait needed for profitability is confidence combined with a healthy dose of fear. 

“One thing that I’ve noticed, and one thing I look for in people who are seeking to become professional traders – and this extends to investing – is that they’re confident,” he said.

“They’ve got the confidence to stand up and try things, because that’s what it takes to learn in markets.”

While his observations may have identified a common trait necessary for investment success, Mr McCarthy was quick to point out that nothing was certain in the world of investing.

“It doesn’t matter how intelligent [or] hardworking we are, we can’t predict the future, but can only keep trying to make the best decisions we can based on the information we have,” he said.

“It’s not about not being wrong, it’s about making sure when we are wrong that we keep our losses minimised.

“When people hang on and hope and end up wiping out a substantial part of their portfolio, that can be very damaging to them, because it undermines their confidence in the markets.”

 





Mr McCarthy also pointed that while healthy fear is a good thing, too much fear can hinder any investor, especially those new to investing.

He said he often sees people do very well when they practise investing with a demonstration account. These are accounts set up to help people learn the ropes of investing.

“But this practice account has play money in it,” Mr McCarthy he said.

“When they convert to real money, everything changes.

“That’s because once we put real money on the line, our emotions start to come into play.

“I’m not saying we should ignore emotions – they’re important parts of us and we all have them, of course – but if we make decisions in our investments based purely on emotion, we’re putting ourselves in danger.”

Mr McCarthy said being able to manage emotions was the key to developing the confidence to invest correctly.

He added: “Investing well is learnt by experience. It’s not something that can be learned from a book.

“The reason for that is it doesn’t just take our brain power to invest well, we also have to control and understand what our emotions are telling us.”

What do you think is the key to successful investing?

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

Investments that you should avoid in retirement

If you want to live well in retirement, investment is the key, but watch out for these

Why investing for retirement is different

In retirement you'll need to find a new way to cover your living costs.

The dangers of not understanding investment risks

Noel Whittaker illustrates the dangers of not understanding investment risks.

Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

Contact:
LinkedIn
Email

1 Comments

Total Comments: 1
  1. 0
    0

    Education, Education, Education.
    There is ample information available, you just have to know where it is and how to disseminate it and sort the Noise out from the relevant data.
    Even with all the relevant information, you will still be wrong at least 40% of the time.
    Your advantage is that when you are right your gains are unlimited, and when you are wrong, you can limit your loss to an arbitrary amount, say 10%.


FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Uncategorized

The last blockbuster had an end of summer sleepover

Several months ago, the last Blockbuster store on Earth temporarily rebranded - as an extremely nostalgic Airbnb. A few lucky...

Australia

Best day trips from Melbourne

We've got more reasons than ever to embrace the adventures we can find in our own backyard and, luckily, Victoria...

COVID-19

Travel SOS: What's the deal with face masks and flying?

Ian has seen reports of people flying without masks and wants to know if it is safe. Q. IanI have...

Mental Health

Frequent travel could make you 7 per cent happier

Every now and then we come across a study that feels as if it's stating the obvious. Such is this...

Uncategorized

Travel does at times confront us and make us squirm

Travel does at times confront us and make us squirm, which it should. Travel also can make us appreciate our...

Accommodation

You can now stay in a Buckingham Palace-inspired caravan

Have you ever wondered what Buckingham Palace would look like squeezed into a four-person caravan on the North Yorkshire coast?...

Flying

New measures will protect Australians from COVID-19 on all flights

Australia's national cabinet has announced new measures to protect Australians from COVID-19 on domestic and international flights and in airports....

COVID-19

Doctors call for action on social media’s health misinformation

The peak body for Australia's doctors has called on the government to invest in advertising to counter health misinformation being...

LOADING MORE ARTICLE...