While we often think of bad habits as having detrimental impacts on our life, we rarely view good habits as "superpowers" that can help us improve all areas of our lives, including our investment decisions.
In psychology, habits are defined as "any regularly repeated behaviour that requires little or no thought and is learned rather than innate." This means we are not born with habits, but rather, we learn them.
Thus, to become better investors, we should rely on ingraining good daily habits in our lives that will give us an edge. Here are five daily habits that can be cultivated to help us improve our investing abilities and knowledge.
1. Waking up early
The early bird catches the worm. This idiom sprawled across your primary school walls was right after all.
Many people dread getting out of their bed earlier than required. However, by ingraining this habit into your daily life, you enjoy a head start on the day. You can use this extra time in the morning to go to the gym, read the morning news, have a good breakfast and even catch up on work before heading to the office.
Apart from becoming healthier and being able to pursue more of your interests, waking up early ingrains discipline and offers you more time to read as well as digest information which every investor requires to be successful.
2. Reading extensively
In a CNBC article Charlie Munger, one of the most famous people in the investing world, and Warren Buffet's righthand man at Berkshire Hathaway, said "In my whole life, I have known no wise people who didn’t read all the time – none, zero."
This should not be a surprise to anyone. The secret to investing better has always been to have more information, greater knowledge, better insights and newer perspectives.
Reading extensively gives you this edge, especially when it comes to making important decisions with your money and investment portfolio.
3. Prioritising savings
Frugality is another important habit you should instil in your lifestyle. If you're just starting out in a job, this disciplined approach will ensure that you are able to build up savings to plough into your investment portfolio.
Even if you're well-to-do or nearing retirement, being frugal ensures you never spend more than you earn. Moreover, it means you're always adding to your retirement nest egg, which will give you improved spending power in the future.
4. Practicing patience
Patience is a virtue many young investors do not have. The "I-want-it-now" mentality often leads to rash decisions, often with negative repercussions.
Remember the story about the turtle and the hare? Slow and steady wins the race.
The same goes for your behaviour when you invest. Don't go all in, don't put all your eggs in one basket, don't overleverage yourself, just to make a quick buck. Those strategies, while sexy in the short-term, never ends well for anyone in the long-term.
When you are patient, you have more time to think through your decisions as well as spot good investment opportunities. This prevents you from buying or selling your investments on a whim simply because of short-term market fluctuations.
For long-term success, this is the kind of behaviour that gets rewarded.
5. Being humble
Treating people with respect, continuing to learn or asking for help from someone else is not only essential to being a good person, but also a good investor.
Far from portraying any insecurity, being humble actually proves that you are confident and self-aware enough to know what you don't know and to achieve better outcomes for yourself.
By listening to advice, analysing different points of views and being open to new ideas, you put yourself in the best possible position to achieve the best results for your investment portfolio.
Start your investment journey today
Building your investment portfolio and growing your retirement nest egg is a long-term process. You don't need to rush into making brash decisions or be forced to take more aggressive positions than what you’re comfortable with.
By adopting good daily habits in your lifestyle, you can make better decisions for your career, health, family and your wealth, including for your investments and retirement.
Aviva's Navigator platform also enables you to access to diverse investments in funds spanning multiple asset classes, geographical sectors and market sectors, making your investment journey easier and hassle-free.