What makes for a good investor? Over the years, I’ve seen good investors, and bad investors. And an awful lot of average investors. From the privileged position of being a Motley Fool columnist, I’ve even been able to interview some of the good investors — investors such as Anthony Bolton, Burton Malkiel, and Charles Ellis.
And if you’re reading this, Warren, the offer’s still open. But what is it that differentiates a good investor from an average investor? Or a bad investor? Some quite simple things, actually. Good investors have a strategy We’ve all seen them.
“Magpie” investors that just pick up shares on a whim — a Sunday newspaper tip, a share that someone from the golf club recommended, a supposedly hot initial public offering, and so on. There’s usually not much more to say about the resulting mess except to note the fact that it is, well, a mess. Better by far to have a strategy.
And even better to stick to it. What might such a strategy be? Investing in growth shares might be one such strategy. Investing for income might be another.
Investing for global diversification might be another. Investing in resources and energy shares might be another. And so on, and so on.
Good investors choose metrics that match their strategy How are your shares doing? Ask this, and you’ll hear some awful answers. “ ” they’ll gush. Yes, but all your other shares are down 10%.
“ ” But what do you expect? You’re invested in growth shares. Some of your shar.
