Knowing yourself

Is it so important to know who you are before venturing into investment? YES, from my experience. Here are some of the most important questions that you need to ask yourself truthfully before investing, especially in high risk investments…
- What are your values?
- What are your strengths and weaknesses?
- What are your good and bad habits?
- How matured is your mindset?
- How much control do you have over your attitude?
Some other questions are:
- How gullible are you, especially to sales pitch?
- Do you like reading, finance and accounts?
- How greedy are you?

Values
Values are moral principles or standards. So, what are your values? For example, do you feel stealing is morally correct? Everyone has their set of values since young. It is vital for you to discover yours. It’s because doing something that conflicts with one’s personal set of values will not produce good results. For example, if you are strongly against selling or doing business, don’t do it.

Strengths & Weaknesses
Both personal strength and weakness are vital to discover, understand and apply correctly. I read some research that states improving your strengths to a greater level is easier than improving your weaknesses. Agree? Does this mean one need not improve their weaknesses at all? Nope. It means put more effort on improving your strengths. For example, if one’s strengths are investment in stocks and unit trust, one should put more effort into improving it to an expert level. Meanwhile, if one’s weakness is in insurance, one can search for professional advice from qualified personnel while slowly self-learning about insurance. Another way is to get an investment partner whose strength is in insurance while weaknesses are in investment in stocks and unit trust. Hence, with the synergy of the team of two, both can offset each other’s weaknesses and possibly produce results far greater than two separate individuals.

Habits
What are your habits? Most people that I have met would say their bad habit is they don’t like reading. The next question is, would this pose a risk towards your investment? Habits are hard to alter, although possible. Identifying alternatives to tackle bad habits would be an easier approach. For example, if one’s bad habit is “bad in paper work and not organized”, one may want to search a companion or financial planners for assistance. As for “dislike reading” habit, one can post question and get answers in forum rather than reading articles like this, although I don’t agree to “not reading”. When good habits are being related to investments, positive results will be gained. For example, being paranoid is at times a good thing in investments. Reason is because you shall not easily fall prey to any scams or rumors.

Mindset
Do you have the right mindset for investment? Right mindset here means matured mindset. Matured mindset in my own definition is ability to see things broadly, listen and accept correct information, filter off scams and misleading sales pitches, able to view things from different angle and most importantly, make decisions objectively.

Attitude
Patience and sense of accountability are vital when investing. An aggressive attitude, meanwhile, can possibly create a good or bad outcome. Greed normally results losses. Although during certain times, when stocks are going up rapidly or dropping sharply, attitude may be influenced, hence, possibly causing a wrong decision being made. There needs to be some sort of control to avoid above said scenarios. Control can be realized through obeying a set of rules.

Remember, when emotion overcomes knowledge, that’s when investment goes bad.