Rational thought: Being able to think logically and objectively is vital. Being able to go back to first principles and boil down a complex story so that its essential elements become upper-most in your mind is required; see the wood for the trees.
A common-sense approach is required when something seems too good to be true.
If the supposed ‘good’ comes out of complex structures that you cannot comprehend then stay clear. For example, while everyone else is jumping in, I can’t see where the supposed value of Crypto comes from, so I avoided the whole circus.
A measured sense of your own abilities
Do not get overconfident. For example, do not get an over-inflated opinion of your genius when you have been through a good period - some of your best performing shares could have been picked just as easily with a pin!
On the other hand, do not underestimate your abilities by focusing on a poor short-run performance. Over short periods of time it is very difficult to differentiate between luck and judgment.
Even highly skilled investors need time for the probabilities to work in their favour. They also need to get used to having underperforming years.
Many great investor had periods of three years in a row when they under-performed.
I'm a full-time investor running my portfolio. I invest other people's money into the same shares I hold under the Managed Portfolio Service at Henry Spain. Each of my client's individual accounts is invested in roughly the same proportions as my "Model Portfolio" for which we charge 1.2% + VAT per year. If you would like to join us contact Jackie.Tran@henryspain.co.uk
investing is about making the right decisions, not many decisions.