Overview – Making the Most of Your Investor Strengths
As a society, we’re obsessed with minimizing our weaknesses.
So much emphasis is placed on making sure we have no sources of vulnerability whatsoever, and understandably so. There are times when a person’s weaknesses and shortcomings can lead to serious consequences, so it makes sense as to why we want to keep them to a minimum.
While minimizing our weaknesses is important, the reverse is also true – it’s just as important to maximize our strengths. So many people are caught up trying to reduce their weaknesses that they forget to use what they’re already very good at.
Investors aren’t perfect, so many of them spend time and energy addressing their weaknesses. However, it’s just as easy for investors to fall into the trap of forgetting to maximize their unique strengths.
Getting Familiar With Your Investor Strengths
When was the last time you sat down and seriously asked yourself what your unique investor strengths and skills are?
When talking about “strengths”, these traits don’t always have to be anything extraordinary. An investor’s strengths can simply be things they find naturally easy to do or something they can perform to a greater degree of skill compared to others.
For example, a person with a naturally relaxed demeanour who can keep their cool even in the most emotionally demanding scenarios has a strength that sets them apart from countless others. A long-time voracious reader who can pick up on small details and read between the lines has developed a strength that others may not have.
So, while many strengths come naturally, there are equally as many, if not more, that are also acquired through time and effort.
The reality is that no two investors are equal, and the reason is simple: they all possess unique skills, specialized knowledge, traits, and other unfair competitive advantages.
Using your strengths to your advantage isn’t necessarily unethical or unfair – you’re simply making the most of what you have at your disposal to your maximum benefit. Skilled basketball players use their height to outmatch smaller opponents and students with excellent memories use it to score better on recall-based tests. Investors utilizing their advantages are no different.
If you have certain traits that can benefit you as an investor, then don’t be afraid to use them. Why would anyone get mad at you for simply using what you’re good at to better set yourself up for success?
Different Ways to Apply Your Investor Strengths
After assessing what your investor strengths are, the big question that typically follows is “How exactly can I put these strengths to use?”
Given investing’s depth and breadth, there is, theoretically at least, no limit on how investors decide to put their strengths to use. These applications can be relatively simple or vastly complex: it all depends on an investor’s circumstances and overall goals.
However, we will go over a few common examples to serve as a source of inspiration.
Assessing Potential Investment Opportunities
In one of our previous articles, we discussed how investors can come up with prospective investment ideas. One of the steps to achieve that was to look at various industries that pique an investor’s interest.
While an investor may come across several industries that catch their attention, there will undoubtedly be some they can understand better than others (this point was touched on in the aforementioned article).
Why do investors understand some industries better than others? One reason is because of the strengths they possess.
Investors who have strong analytical and numerical skills may have an easier time analyzing very technical industries such as technology and finance. Those who have a keen eye for creativity may better understand the entertainment and fashion industries better than those who don’t.
These unique investor strengths can further be applied when looking for individual companies to perform in-depth quantitative and qualitative analysis on.
Making Major Investment Decisions
Investors make all sorts of decisions, but how they go about making them will vary significantly. This, again, can be attributed to the unique traits that different investors have.
Some decisions, such as deciding which prospective investments are worth pursuing, require various factors to be taken into account. Forgetting to account for all relevant factors may mean the difference between a good or terrible decision.
Investors who know how to be methodical and can logically organize their thoughts with minimal difficulty will have a relatively easier time making these big decisions as opposed to someone who doesn’t have the same mental prowess.
Time and time again, many investors fall into the trap of making emotionally driven decisions, which usually end up being detrimental. While this is, unfortunately, a common occurrence, investors who are skilled at keeping their emotions in check and find it naturally easy to keep their cool are less susceptible to making this same mistake.
Avoiding Potential Investment Traps
One of the frustrating aspects of investing is knowing how to avoid potential investment traps. That is, a potential investment that looks very promising at first glance, but upon further inspection is a ticking time bomb.
While these traps may sound easy to uncover, nefarious players constantly find new ways to hide their red flags in plain sight, maintaining an image of legitimacy in doing so. Sometimes, these red flags can be found in publicly available documents, such as press releases and annual reports.
Some investors unknowingly fall for these traps, while others can successfully detect and subsequently avoid them. How? By relying on certain strengths they have.
Investors who have an eye for detail may be able to better pick up on anomalies in the data that others may otherwise miss. Those who are experienced readers may have developed a superb ability to read between the lines and may realize when reports employ creative wording to try and deflect unwanted attention.
Maximizing Investor Strengths and Working on Weaknesses Go Hand-In-Hand
We started off this article by talking about how most people, investors included, spend too much time trying to minimize their shortcomings that they forget to make the most of what they’re already good at.
Our discussion so far makes it seem like there’s a choice between maximizing investor strengths or learning to address their weaknesses. In other words, it sounds like these two are mutually exclusive.
However, that isn’t the case at all.
In order for investors to be as effective as possible, they must know how to make the most of their strengths while simultaneously taking the time to address their shortcomings.
This may sound like an obvious thing to keep in mind, but this is simply a reminder not to get too caught up with doing one of these things. Focusing on one while neglecting the other won’t unlock an investor’s full potential: only by doing both can that be achieved.
Having Certain Strengths Isn’t an Excuse for Complacency
NBA player Stephen Curry will go down as one of the greatest shooters to ever grace the basketball court due to his incredible accuracy and mind-boggling range. Yet, despite his otherwordly shooting skills, he continues to work on it regularly. Why? To continue to shoot the way he does, while also finding new ways to improve.
Having certain investor strengths is great, but that doesn’t mean investors can rest on their laurels because of them. Time and effort must still be spent to maintain, or even improve, these traits.
Now, some investor strengths come naturally and can’t be improved any further, such as having a naturally strong memory or having a laid-back demeanour. However, the argument can be made that the number of investor strengths that are acquired/developed comfortably outnumber those that come naturally.
Having an eye for detail, reading between the lines, being methodical: these are all skills that can be developed, and as a result, can be further improved.
Just because an investor happens to be highly skilled in certain things doesn’t mean they will retain that level of skill forever. Certain investor strengths can deteriorate to the point that they can’t be called a strength anymore – but only if they become complacent.
If investors take the time to find ways to improve, or at least maintain their strengths, then they can enjoy the benefits of those strengths well into the future.
Wrapping Up
People spend a lot of time and energy trying to minimize, or outright eliminate, any weaknesses they may have, and understandably so. However, it’s easy for them to forget that they already have certain strengths that they aren’t fully utilizing.
Likewise, most investors possess certain traits, both natural and acquired, that can set them apart from the rest of the crowd yet forget to make the most of them.
While having certain investor strengths is certainly beneficial, this doesn’t mean investors can take it easy. Time and effort are still required to ensure these strengths remain effective or even improve them.
