Hardest Part of Investing: Discipline

Is this true?

For sure, it is.

What is Investing Discipline?

Discipline the skill where by one makes the right investment decision, based on facts and figures. It means, staying away from potential opportunities when the risk / rewards are not favorable, i.e. staying away from herd mentality.

Discipline is acknowledging when a mistake has been made and make the necessary adjustments.

While some are more naturally disciplined then others, I do believe there are some guidelines to follow which may improve results.

Below is the list of points which one should follow for being successful investor – according to me. 

Rules of Successful Investing 

1. Focus on the process of investing, not the results. If the process is sound, results will ultimately follow.
2. Keep the process as simple as possible.
3. Don’t be an emotional investor.
4. Bet big when the risk/reward is in your favor.
5. Buy value, by looking for opportunities with Margin of Safety.
6. Don’t follow the herd - Buy when others are selling and sell when others are buying.
7. Be patient - Rome was not built in a day and companies take time to grow to their full potential.
8. Understand the 4 letter work RISK. – All investments contains risk.
9. Diversify your portfolio, but please don’t over diversify. – By the way diversification is not only putting your eggs in more than one basket, but selecting those securities which are not Correlated - Clear your concept.
10. Include Emerging Markets like the BRIC’s and more in your portfolio.
11. Don’t listen to your friends or neighbours when it comes to making investment decisions. Others don’t know your condition.
12. Don’t listen to the brokers as they are salesman – don’t forget they have their own sales targets.
13. Part sell your winners. I hope every one knows what happen in the year 2007, if not I’ll remind you. The markets reached the peak and came down likenever seen before. The winning positions were not winning any more and the losers got wiped out.
14. Don’t be afraid to book loss – Don’t Average down as averaging rarely works.
15. And last, but not he least – for those who are young, please start your investment process early.