So just what is a habit?
A habit is:
- a recurrent, often unconscious pattern of behaviour that is acquired through frequent repetition, and,
- an established disposition of mind or character.
As an investor,you need to not only learn to do it well but also to do it with some consistency, and do it without struggling to remember what you did last time.
As a low volatility investor, you are not likely to be as active trading in the markets as some other investors, and you may not watch as closely.
Any investor - active, inactive, aggressive or low volatility - has a duty to keep up with his or her investments.
For the low volatility investor and others, it is important to develop certain habits, routines, or thought processes for:
- choosing investments,
- watching and managing investments, and
- selling or replacing investments.
With the right habits, you will increase the chances of success.
Turning principles into habits
Investors have obvious goals: to produce wealth and to preserve capital.
Anything an investor does should address both goals, preferably simultaneously.
As an investor, you are motivated to succeed and, over time, you build a set of strategies and tactics to help you achieve those goals.
"Motivation is what gets you started. Habit is what keeps you going."
It is easy to get motivated. It is harder to learn the ropes - the skills and techniques - required to become a good investor.
But what may be hardest of all, once you gain experience and enjoy some investing success, is to turn those skills into habits.
Habits that become built in, second nature, repeatable and predictable, and not only lead to good results but help you avoid bad ones.
Without consistent habits, low volatility investors will make mistakes and find themselves off in the weeds.
Good investing habits are like a good golf swing: apply those habits to every investment choice and you won't succeed every time, but your chances for success will brighten considerably.
