5 Traits of Successful Investors

Investing is a powerful way to achieve financial stability and build long-term wealth. While anyone can be an investor, achieving long-term success is rarely a matter of luck. It demands intentional effort and discipline. Successful investors consistently grow their portfolios over time, often matching or outperforming broad market benchmarks.

So, do you consider yourself a successful investor? Let's explore 5 key traits that many successful investors share:

1. They invest and stay invested

It may sound obvious, but to be a successful investor, you must first be an investor. Getting started is relatively easy; the real challenge lies in staying invested. Successful investors don’t just dip in and out of the market; they commit and remain invested, even during periods of volatility. That resilience often comes from maintaining allocations and holding instruments they understand and are comfortable with.

Over time, experience has taught them that trying to time the market or selling during downturns rarely leads to better outcomes. Instead, staying the course, especially during crises, often proves to be the wisest and most rewarding decision.

A performance analysis by T. Rowe of 3 hypothetical investors with USD 10,000 invested in the S&P 500 index over the 20-year period ending 31 Dec 2024, concluded that staying invested led to significantly higher returns.

• Investor 1 stayed invested and ended up with USD 61,750
• Investor 2 missed the 10 best days and ended up with USD 22,871
• Investor 3 missed the best 20 days and ended up with USD 9,724

2. They build a diversified portfolio

Successful investing isn’t about picking a few stocks based on tips from friends or casual conversations. It’s about building a well diversified portfolio that includes a range of assets across sectors, geographies and investment styles.

Diversification is essential. While it doesn’t guarantee gains, it helps manage risk and enhances the potential for returns by spreading investments. With a diversified portfolio, when one part of the market is down, others may be up, creating balance and resilience across different phases of the economic cycle.

Successful investors often start with a core portfolio that reflects the broad market, typically through ETFs, and then strategically add satellite investments in more specialized areas like international equities, emerging markets, small-cap stocks or derivatives.

How to do it: You can use Saxo’s screener on our platforms to find ETFs for building a diversified portfolio. For the core portion, look for:

• Broad market ETFs (e.g., MSCI ACWI, S&P 500, MSCI Europe)
• Bond ETFs (e.g., Global government Bonds, Global Corporate Bonds )

For the satellite portion, target:

• International markets (e.g., MSCI Emerging Markets, MSCI EM Asia, MSCI EM Latin America, MSCI EM EMEA)
• Sector-specific ETFs (e.g., tech, healthcare, clean energy)
• Thematic ETFs (e.g., small-cap, AI, ESG)

3. They invest regularly

Unless you're among the fortunate few with a large sum to invest upfront, reaching meaningful financial milestones (yes, even that million-dollar mark) requires consistent contributions over time.

Successful investors make it a habit to invest regularly, steadily adding to their portfolios to harness the power of compounding. Regular investing simply means allocating a portion of your income or revenue to the stock market on a consistent basis. The amount and frequency can vary depending on your financial situation, but contributing a fixed percentage of your income on a monthly basis is a practical and effective starting point.

How to do it: Consider setting up an automated transfer from your bank account to your investment account. Alternatively, use tools like Saxo AutoInvest, a monthly ETF savings plan (available in some markets) designed to automate investing and make it easier for individuals to build long-term wealth. 

4. They think long-term

While it's possible to get rich quickly, it’s usually through speculative trades, which can just as easily lead to significant losses. Building wealth through investing is achievable, but it is a long-term game.

Successful investors understand that meaningful gains often come from holding quality investments over time rather than chasing short-term wins in markets. They recognise that markets fluctuate, and don’t panic sell when things get rough. They invest with a clear goal in mind, lay down a solid foundation, and stick to their plan even during downturns. The objective remains their focus, and they stay the course until they reach it.

Investing plays a key role in helping people achieve financial stability. Whether the goal is to retire comfortably, build wealth, or simply keep up with rising costs, investing for the long term is one of the most effective ways to build wealth. 

5. They live within their means

Successful investing is part of a disciplined, holistic approach to managing personal finances. Consistent investing requires having funds available after covering essential expenses, which means maintaining financial order.

Living within one’s means helps reduce the risk of needing to liquidate investments at inopportune times to cover unexpected expenses or liabilities. It’s not necessarily about being frugal; rather it’s about understanding what one can afford and making intentional, rather than impulsive, spending decisions.

How to do it: Start by understanding your total spending, distinguishing between essential and non-essential expenses. Aim to save and invest a fixed portion of your income. Then, reduce non-essential expenses to create room for long-term financial goals.

Final thoughts

Successful investing isn’t about luck; it’s about discipline and mindset. With the right habits, anyone can build a portfolio that grows steadily over time. Successful investors come in many forms. You don’t need to embody every trait listed above, but take a moment to reflect on how many resonate with you. If some aren’t yet part of your toolkit, consider adopting them. They could be the key to unlocking even greater success in your investing journey.