What’s the #1 Trait of a Good Investor? Intelligence… or the Ability to Do Nothing?

[Onda]

The best investors aren’t the smartest — they’re the ones who can keep their head when the screen is bleeding red and everyone around them is losing theirs. IMO real edge is emotional control plus patience: the willingness to do nothing, to sit on your hands while fear and hype scream for action, and let time do the heavy lifting. In one sentence: Control yourself, stay patient, and keep it simple.

What do you think matters most — temperament and patience, or something else like intelligence, a clear plan, deep research, or disciplined rebalancing?

 

[pjigar]

For most people doing index investing, doing nothing is the best trait. For some select few who act and behave like the owners of companies/stocks they buy: Ability to stand against the crowd for a very (or very very) long time is the best trait.

 

[YellowSubmarine]

Emotions. i.e. keeping fear and greed in check and follow the plan.

 

[albireo13]

discipline

 

[Aerides]

I would never define myself as an investor. I read some threads that make it look like many folks spend their retirement checking their accounts and things on a daily basis, which sounds like work to me!

Set it and forget it, check in maybe monthly. Working well enough for me so far!

 

[frayne]

The emotional discipline to keep your head in times of volatility and stick to your plan.

 

[OldShooter]

Buffett: "Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell." ... "Lethargy, bordering on sloth should remain the cornerstone of an investment style."

(edit) Jack Bogle: "Don't just do something. Sit there."

 

[SnowballCamper]

You have to have both intelligence and discipline. I would certainly consider Charlie Munger to generally be in the "smartest" category. Curiosity is also necessary.

But to be just good, and not necessarily great, all you need is the discipline to follow a prudent strategy that gets you index returns.

 

[TickTock]

I think that intelligence, a clear plan, deep research, or disciplined rebalancing don't mean much without temperament and patience. Temperament and patience are necessary, but not sufficient.

 

[Texas Proud]

Well, if you are like my oldest sister the key is to NOT look...

She has not looked at her holdings in 3 or so years... I recently told her her balance and she was surprised..

We set up her portfolio maybe 12 to 15 years ago and have done very little since... she has a great return..

 

[Mr. Tightwad]

Luck.

And a few good decisions.

 

[Dtail]

I would never define myself as an investor. I read some threads that make it look like many folks spend their retirement checking their accounts and things on a daily basis, which sounds like work to me!

Set it and forget it, check in maybe monthly. Working well enough for me so far!

Actually, many of us who check their balances daily are not active investors either. Some of us just like numbers and don't act on it any more than someone who checks less frequently.

 

[pjigar]

Actually, many of us who check their balances daily are not active investors either. Some of us just like numbers and don't act on it any more than someone who checks less frequently.

I fall in this category. I check every day (morning routine) mainly to check for fraud charges but I use account aggregation so it shows the net worth as well. Proudly doing "nothing" since last 15 years!

 

[Dtail]

I fall in this category. I check every day (morning routine) mainly to check for fraud charges but I use account aggregation so it shows the net worth as well. Proudly doing "nothing" since last 15 years!

There you go. I also check my checking account and CC for possible fraud, in addition to keeping track of daily spending. The total time for all these actions is (wait for it).........15 minutes daily.

 

[FD1000]

The best investors aren’t the smartest — they’re the ones who can keep their head when the screen is bleeding red and everyone around them is losing theirs. IMO real edge is emotional control plus patience: the willingness to do nothing, to sit on your hands while fear and hype scream for action, and let time do the heavy lifting. In one sentence: Control yourself, stay patient, and keep it simple.

What do you think matters most — temperament and patience, or something else like intelligence, a clear plan, deep research, or disciplined rebalancing?

Most investors are better off buying and holding, with minimal trading. Index funds are ideal for that approach, that’s exactly how John Bogle built Vanguard into an industry giant.
However, for select investors who have tested, learned, and consistently executed a well-designed trading system, doing nothing isn’t always the best option, especially in retirement, when capital preservation becomes critical and you already have sufficient assets.
Why would I simply sit back and watch my portfolio decline by 20–30% and potentially jeopardize my retirement, if I have a disciplined strategy designed to manage that risk?

Nothing is guaranteed in investing. The S&P 500 lost money from 01/2000 to 01/2010. In 2022, both stocks and bonds declined at the same time. Even diversification isn’t a cure-all, sometimes leadership and selective concentration in the strongest areas can be more effective.
I check the markets twice during the day and once around 7 p.m., but most of the time I do nothing. Staying informed doesn’t mean constantly trading, it means being aware and ready.

Ironically, the investor who checks only once a month may experience more stress when suddenly seeing their portfolio down 5%. I prefer to monitor in real time, guided by my model, so decisions are deliberate rather than emotional.

 

[Steelpony]

Answering the question and echoing others knowledge is the #1 trait.

You have to know all your options along with the good and bad traits of each before you’re knowledgeable enough to form a well thought out plan.

I’d choose the proper temperament as a close 2nd.

.

 

[Al18]

SP500 doesn't move in a straight line, according to S&P 500 Historical Prices by Year - Multpl

SP500 1/1/2000: 1426
SP500 1/1/2008: 1424
SP500 1/1/2013: 1480

 

[street]

Doing nothing!! Every time I try to improve my portfolio I doo more damage and always costs me. I made a couple moves last year and I paid for it dearly. Lol

 

[audreyh1]

Well you got to put aside/save/invest that money in the first place. Some people never even get to that! After that leaving well alone. Intelligence - not really required. I knew plenty of brilliant folks that had no clue about investing.

 

[TheWizard]

If you have a decent taxable account with recent purchases, like I do, then it's helpful to monitor your holdings in a down market to determine when to Tax Loss Harvest.

And I don't mean to sell your VOO lots with losses and hold the proceeds in cash.
I mean to sell all your negative VOO lots with a single Market Order and then buy a similar amount of VTI via Market Order within 15 minutes...

 

[Texas Proud]

Most investors are better off buying and holding, with minimal trading. Index funds are ideal for that approach, that’s exactly how John Bogle built Vanguard into an industry giant.
However, for select investors who have tested, learned, and consistently executed a well-designed trading system, doing nothing isn’t always the best option, especially in retirement, when capital preservation becomes critical and you already have sufficient assets.
Why would I simply sit back and watch my portfolio decline by 20–30% and potentially jeopardize my retirement, if I have a disciplined strategy designed to manage that risk?

Nothing is guaranteed in investing. The S&P 500 lost money from 01/2000 to 01/2010. In 2022, both stocks and bonds declined at the same time. Even diversification isn’t a cure-all, sometimes leadership and selective concentration in the strongest areas can be more effective.
I check the markets twice during the day and once around 7 p.m., but most of the time I do nothing. Staying informed doesn’t mean constantly trading, it means being aware and ready.

Ironically, the investor who checks only once a month may experience more stress when suddenly seeing their portfolio down 5%. I prefer to monitor in real time, guided by my model, so decisions are deliberate rather than emotional.

Because studies have shown that almost everybody who thinks they have a plan and are actually trading do not do as well in the long run as the set it and forget it crowd... that is why the vast majority of managed funds do not even match the market.. much less match it without taking more risks..

A quick look and it looks like 15% beat over a 10 year period but that does not include the funds that get closed because of poor performance...

And since 'professional' traders have a hard time beating the market I doubt many of the regular folks will have much of a chance...

 

[jollystomper]

Well you got to put aside/save/invest that money in the first place. Some people never even get to that! After that leaving well alone. Intelligence - not really required. I knew plenty of brilliant folks that had no clue about investing.

I agree. If asked by folks IRL my reply is "we are better savers than investors". Steady disciplined saving - beyond 15% of our income - and then investing simply - "going for singles instead of swinging for the fences" - with few changes over time is what ultimately moved us into the FIRE community.

 

[Onda]

However, for select investors who have tested, learned, and consistently executed a well-designed trading system, doing nothing isn’t always the best option, especially in retirement, when capital preservation becomes critical and you already have sufficient assets.

I’ve known plenty of people who claimed they had a well-designed trading system, and most of them ended up doing very poorly over time.

 

[EastWest Gal]

The best investors aren’t the smartest — they’re the ones who can keep their head when the screen is bleeding red and everyone around them is losing theirs. IMO real edge is emotional control plus patience: the willingness to do nothing, to sit on your hands while fear and hype scream for action, and let time do the heavy lifting. In one sentence: Control yourself, stay patient, and keep it simple.

What do you think matters most — temperament and patience, or something else like intelligence, a clear plan, deep research, or disciplined rebalancing?

No one said the obvious answer: Having the intelligence to do nothing.

 

[Stormy Kromer]

Buffett: "Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell." ... "Lethargy, bordering on sloth should remain the cornerstone of an investment style."

(edit) Jack Bogle: "Don't just do something. Sit there."

This is probably thw best post I have seen on this forum.