Quora Answer: How Do I Become a Good Investor?

The following is my answer to a Quora question: “How do I become a good investor?”

Perhaps the single most important skill we all need to be a good investor is the ability to keep our head when the market is panicking.  Much of the market is not moved by logic, but sentiment.  When the market falls, and people are selling, it is an excellent time to consider the value of underlying assets and looking for bargains.  It is important to remember that paper loss only becomes realised loss when you cash out.

Conversely, look to invest for the long term, after doing some homework on the management, performance, and prospects of a company or fund.  Investing should not be treated like some sort of jackpot, where positions are taken based on “tips”.  People who do this might make the odd profit, but they will underperform overall.