Slideshow 5 Tips From Top Traders

  • January 24 2013, 4:43pm EST
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5 Tips From Top Traders

What makes an online trader successful? Fidelity Investments surveyed its top trading customers, those with a 12-month portfolio performance of at least 20%, to find out the secrets to their investing success. Here are their top five tips.

Source: Fidelity Investments’ inaugural Top Traders Survey.

Shoot for the Stars, Settle for the Moon

• Most top traders set reasonable expectations for themselves. Sixty-four percent define investing success as a positive total gain in their portfolio, 31% define it in comparative terms to an index, and five percent define success as breaking even.

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Take Risk Head-On

• 62% of top traders surveyed say they are willing to take on large risks for the prospect of large returns, while only 9% say they would be willing to accept lower returns for less risk.
• 68% believe investing is a calculated risk.

Focus on the Big Players

• Top traders are primarily bullish about large cap stocks, with mega cap stocks taking second place.

You Are Your Own Best Teacher

• 53% of top traders use their own experiences with a product or company to generate new investment ideas.
• 39% of top traders who beat the S&P 500 Index’s rate of return as of the survey date attribute their investment success to their own knowledge base and research.

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No More Tears

• 32% of top traders say other traders are too emotional in making investment decisions, follow what’s trendy or sell too quickly.
• Since the U.S. financial crisis of 2008, 56% of top performers say they have remained or have become more of a long-term investor.