Dmitrii Khasanov is an angel investor, digital marketing expert and founder of Arrow Stars.
Investing can be a challenge. Success in this area requires knowledge, but also discipline, emotional resilience and the ability to analyze. Over the years, I’ve observed that successful investors, regardless of their approaches and strategies, consistently follow a set of universal principles to navigate even the most turbulent times and achieve remarkable results.
A solid investment plan is key.
One of the biggest mistakes new investors make is acting on impulse. I’ve seen how people jump into the market without a clear plan, driven by the allure of quick profits. However, having a structured and well-thought-out plan is the foundation for long-term success.
Investment planning acts as a roadmap, helping you to make decisions and saving you from potentially risky moves. It’s about risk management. I advise sticking to your plan regardless of temporary market movements. It requires patience but, in my experience, pays well in the long term.
Never invest money you can’t afford to lose.
One of the first lessons I learned was to never invest money you can’t afford to lose. Even if it is a seemingly 100% sure asset, other unpredictable, outside variables can cause it to lose value. Thus, every investor should have a financial safety net—a reserve fund that can provide some peace of mind and stability when investments underperform. This cushion also comes in handy with everyday expenses and prevents the need for panic in moments of temporary losses.
I recall a partner who, inspired by initial stock market success, invested all his savings in a single company’s shares. While the gamble paid off at first, a downturn in the market wiped out nearly everything he had. It was a painful but invaluable lesson for him. Today, he always sets aside a portion of his funds for unforeseen circumstances.
Build wealth gradually.
Gradual wealth accumulation is a strategy that helps you grow your returns while minimizing unnecessary risks. By staying patient and disciplined, you can navigate market fluctuations and steadily build a solid financial foundation for the future.
I recommend dividing your profits into two parts: one for personal use and the other for reinvestment. In my experience, this serves your portfolio and instills financial discipline. Remember that even minor, consistent contributions can eventually compound into a huge amount.
Balance risk and reward.
Imagine every investor has a scale, with one side representing risks and the other potential gains. Well-experienced investors carefully weigh both before making any investment. Striking this balance allows them to make informed decisions and avoid excessive exposure. It’s kind of like driving a car: If you focus only on following the road, without minding any obstacles, the chances of crashing are relatively high.
I once saw an entrepreneur invest heavily in a high-risk startup without conducting proper analysis. The project failed, and he lost a significant portion of his funds. That experience likely taught him the importance of evaluating not just opportunities but also potential threats.
Learn from the past.
Some investors focus only on patterns rather than learning from past mistakes and successes. Some hold on to the victories of one successful deal and project that onto similar ones, while others project the failures of one project onto others. I’ve found this approach doesn’t work.
Successful investors constantly learn from their mistakes. They analyze what went wrong and make necessary adjustments in the strategy. A step further, however, is to learn from the mistakes of others. The history of investing is filled with examples of poor decisions that led to catastrophic outcomes. Studying these cases can help you avoid similar traps.
Master your emotions.
Nowadays, mental health is becoming a top priority, and part of that is learning to master your emotions. Fear and greed can lead to decisions that contradict your strategy. For instance, during market highs, it’s easy to be tempted to pour all your funds into high-growth assets. But rapid growth often comes with equally rapid declines.
On the other hand, panic at a downturn in the market may result in the selling off of assets at a loss, even though a long-term strategy would suggest waiting for recovery. Whenever I’m feeling this way, I remind myself that it’s a marathon, not a race. Maintaining composure in any situation is what separates successful investors from the rest.
In closing, I would say that investment is an art that requires a fusion of learning, patience and discipline. But perhaps the most important lesson I’ve learned in life is that investment success is not just about how much money one makes. It’s also about personal growth and learning how to take setbacks and turn them into opportunities. At its core, investing is not just about finances; it’s about your ability to look ahead and act with confidence.
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