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How Do They Do It? 5 Tips From Top Investors

stock market . / Credit: Stocks Image via Shutterstock

Top investors are worried about economic uncertainty around the globe, new research has found. In fact, 68 percent of traders cited this uncertainty as one of the top three investment concerns for 2013.

Inflation is another concern, with 70 percent of investors mentioning this, a poll of top traders at the financial services firm Fidelity revealed. As a result, 42 percent of those investors will adjust the frequency with which they trade in the next six months.

Despite those uncertainties, traders have advice for others when it comes to making the most of their investments. Top traders were defined as those who executed at least 36 trades in the past year and experienced at least a 20 percent growth of their portfolio.

"We view this survey as an excellent opportunity to look inside the minds of some of our best traders," said Ram Subramaniam, executive vice president of Fidelity’s retail brokerage business. "These investors are setting the standard for performance using our online brokerage platform and their insight can be immensely valuable to other traders looking to gain an investing edge."

Their advice includes:

  • Shoot for the stars, settle for the moon— Sixty-four percent of traders say they define investing success as a positive total gain in their portfolio, while 31 percent say they define success compared to the performance of an index. Just 5 percent define success as breaking even.
  • Take risk head-on—Nearly 70 percent of traders say that investing in general is a risky proposition, calling it a calculated risk.  Additionally, just 9 percent of investors say that they would be willing to accept lower returns for less risk.
  • Focus on the big players— Top traders say to focus on large cap and mega-cap stocks.
  • You are your own best teacher— A majority oftop investors also say that they use personal experiences with a company or product to come up with new investment ideas. 
  • No more tears— Traders say that other investors need to leave emotion out of their investments. Thirty-two percent of investors say that other traders are too emotional in their investment decisions.

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