Why are some more successful than others?

Many people assume successful people rely on connections, luck or an inheritance to build wealth. In reality, those who continue to grow their fortune almost always take a different path than the rest of the investing crowd. Being different can pay high dividends in the investing world. Here is what successful investors do different:

1. Risk Tolerance
There has to be some tolerance for risk in order to make a meaningful amount of money in a reasonable amount of time. Tolerate risk and take a few chances. An uber-conservative approach compares like sitting on the sidelines and doing nothing. Take risks to a certain point and you will be on your way to compounding wealth.

2. Investing Cues from Mass Media
Those who fail to achieve investing success often allow outside forces to strongly influence their decisions. Be more self-righteous, focused and careful when it comes to investing. By the time a business opportunity it is already in the public spotlight and on the news, the opportunity is already gone.

3. Contrarian Strategy
Contrarian investors almost always do the opposite of what the investing masses do. This means if the masses are bullish on the market, the contrarian stays put. When the masses get out of the market, the contrarian starts to buy! Those who can separate fact from hype, capitalize on over-eager investors and novices looking to make a quick buck by riding the wave. Keep an open mind to the contrarian investing strategy., The

4. Shrug Off Investing Tips
Those who have had their own success are less inclined to follow the advice of false experts. Investment tips are a lot like opinions. Everyone seems to have one to everything. Don’t assume another person’s information or research are accurate. Break free from the pack and think critically before investing your hard-earned savings.

5. Value
Value is the name of the game when it comes to investing in a business. Value always pays off in the long term.
Value is typically the stock price in relation to the total number of shares. You can look at charts and analyse important fundamentals like P/E ratio, price-cash flow ratio, price to book ratio or book-value. Make prudent use of these tools, and you will be able to identify lucrative opportunities for overlooked value. Alternatively, the charts and important fundamentals can also be used to review stocks in an investment portfolio to pinpoint those that might be overvalued.
Those who enjoy investing success are willing to put in the time to perform in-depth analyses of financial ratios and other details to determine if a value opportunity exists.

6. Opportunism
Similar to a contrarian approach, take opportunities when others don’t. If a stock has been beaten down well beyond any reason, the opportunistic investor will take advantage of such fire sale prices. A good quality stock that is undervalued will bounce back to life. This is an example of how the willingness to tolerate risk can pay off in a big way.

Sven Franssen