How to Be a Better Investor

Learn to read markets.
Managing money is as much art as it is science. Anyone can study investment analysis, said Brown. But when he looks to hire a money manager, he looks for an elusive sixth sense that can't easily be taught. Those who have it see the market as a mosaic, he said. They're able to assemble disparate and often conflicting pieces of an economic, political, psychological and social puzzle. "You have to be able to assemble all of these various pieces of information, make some sense out of them and make a rational decision," said Brown. "It's hard to find that kind of talent."


Deal with your mistakes.
Confidence is important but must be balanced with humility, said Cates. Otherwise, you're undone by your mistakes, instead of schooled by them. "You've got to take mistakes hard," said Laporte, "but you've also got to move on." That's especially true in a business that generates so much feedback. Daily stock prices are more feedback that anyone needs or wants.

Know the Manager
Investors should investigate the decision-making process at the fund. Find out what the specific criteria are for selecting securities. Is management a team effort? Familiarize yourself with the members of the team and how they work together. Are there a couple of superstars? Ask how they're retained and compensated. Lastly, ask how much the managers invest in their own fund, to gauge how aligned their interests are with yours. "That's a huge one," said Cates. If it's not advertised, I'd assume it's not a lot and worry about it."

Be a Contrarian
Every investor fancies himself or herself a contrarian -- the same way everyone's child is above average and all drivers are good ones. But contrarians are that way throughout life, not just in the market, said Cates. Have you ever tuned out the crowd to go your own way? Maybe it's the college you attended or the career you forged or where you chose to live.

Be Patient
Good Investments take time to mature. As Warren said you can't produce a baby in a month by making nine women pregnant.

Be an Investor and not a Trader
Finding good companies at a fair price rather than finding great companies at a lousy price


Based on an article by Anne Kates Smith, Senior Editor, Kiplinger's Personal Finance