Why Kevin O’Leary Says You Must Do These 3 Things to Be a Successful Investor

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Here’s what makes a successful investor, according to Mr. Wonderful. 

Venture capitalist and Shark Tank star Kevin O’Leary has made his fair share of investments and reportedly built a net worth of $400 million. He occasionally posts investing advice on Twitter, and recently, he shared some words of wisdom. What are his secrets?

He says that to be a successful investor, “you must remain alert, curious, and in touch with what’s happening in the world.” It does veer pretty closely to what you’d read in a fortune cookie, but it makes sense overall. Let’s look at each of these recommendations to see what O’Leary means and why these things matter.

1. Be alert

Investing is all about predicting whether a company will grow or decline in value. Alert investors have a better chance of accurately predicting where companies are headed. They’re more likely to notice signs that a company is poised for growth or red flags indicating potential problems.

2. Be curious

The best investors are lifelong learners. For perhaps the most famous example, legendary investor Warren Buffett is known for how much he reads. He has estimated that he spends up to 80% of each day reading, and he says the key to success is reading 500 pages per day. Being curious about new subjects is great for investors because it expands your knowledge, and it could also help you find new investment opportunities.

3. Be in touch with what’s happening in the world

The stock market doesn’t exist in a vacuum. If you want to invest, it certainly helps to learn about investing and how to analyze stocks. However, it’s also important to stay up to date on world events. These also have a significant impact on investments, which is why most successful investors check the news at the start of their day.

How to put Kevin O’Leary’s advice into practice

O’Leary’s advice is basic, but it’s helpful for new investors who want to learn how to pick stocks and put together a quality portfolio. Of course, being alert, curious, and in touch with what’s happening are all things you need to work at. Here are a few tips on what you can incorporate into your daily routine to build those traits:

Set aside time to read investing advice, either online or with well-regarded investing books.Check economic and investing news every morning so you know what’s going on in the world.Read expert stock picks, not just for ideas on what to invest in, but to see how successful investors decide what to buy.

Or, go with a more passive investing approach

It’s worth mentioning that O’Leary’s tips on being a successful investor primarily apply for active investors. Active investing refers to managing your portfolio yourself. You decide which stocks to buy, when to buy them, and when to sell.

This isn’t your only option, though. There are also passive investment products that invest your money for you. Options include:

Index fundsExchange-traded funds (ETFs)Mutual fundsTarget-date retirement funds

These types of funds pool money from investors and use that money to buy a large number of stocks. Some also include bonds as part of their holdings. You can invest in them through online stock brokers, as well as with retirement accounts.

The advantage of these funds is that they take most of the work out of investing. All you need to do is choose a fund you like. Target-date retirement funds are a popular choice, and so are index funds tracking the S&P 500. Then, you just invest more every month.

O’Leary is more or less right about what makes a successful investor. If you’ll be actively investing, then you will need to be alert, curious, and in tune with what’s going on in the world. But you could also do well with a passive investment product, so there are multiple paths to success.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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