In our society, success is directly related to financial success. Society judges your success by the size of your house and the type of car you drive. In the investment world, if society recognizes your financial success, they may designate you as a "smart investor".
Well, the questions are, does investment success correlate with smartness? Are financially successful investors smarter than average Jill or Joe? Are people like Warren Buffett, Carl Icahn, George Soros, and other successful investors smarter than retail investors? Do they have some advanced education that you and I could not have? Do they have some special skills? I do not think so. The answer lies in their ability to take the risk, embrace failure and learn from it, stay focus, and achieve their goals and objectives. The majority of financially successful people started with little and they have achieved tremendous success.
I just recently came across a blog "Rethink Risk" authored by Adam Backer founder of Man vs. Debt. (I highly recommend to read this post and all comments readers made). He has defined risk very differently then what I understood. As stated in his post, "by nature, whenever humans estimate potential loss – we grossly exaggerate it". This statement is very profound and that's where the majority of people fail.
Failure to the majority of retail investors attributable to their fear, lack of strategy and discipline, and accepting it instead of learning from it. That's the difference between financially successful people and average retail investors. This is not merely true for market investors, its true for whatever you want to achieve in your life, your dream.
How often we have experienced that markets dropped to the point where we felt it was the end of the world. But they always came back and made new highs. That tells us one thing, there will be failures but if you stick to your goals, stay focus, and believe in yourself, eventually, you will get up and bounce back to a new high. You do not need any special education or training or smartness to be financially successful. Of course, like everything else in life, investing also demands some knowledge. Knowledge is power. No reason for anyone to believe that financially successful people have some special skills, smartness, and/or education. However, they have achieved their success while learning from their failures. Every time they fall, they just get up. In my view, there is a strong correlation between financial success and the ability to think, new ideas, no fear of failure, and self-confidence.
Believe in yourself and believe no one else is smarter than you are and you can achieve whatever you want to achieve. Nothing can stop you unless you stop yourself.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Please do your own research before making any long term or short term investment decisions.