From value investing to growth investing to index funds and currency markets, the best investors of all time have employed a variety of different strategies to build wealth.

Admittedly, some of the richest investors used techniques like activist investing and obscure financial instruments that the average person can’t mimic. But thankfully, the best investors in history share five common traits that we can all learn from and utilize to build our own market-crushing portfolios.

The names of the world’s richest investors you should already know — people like Warren Buffett, Peter Lynch and George Soros.

But here are the five common traits these wildly successful investors used to amass serious wealth:



Berkshire Hathaway (BRK.B) CEO Warren Buffett, the greatest value investor of all-time, embraces a mentality that’s dramatically opposed to the way most people think about the stock market; Warren Buffet thinks of huge market downturns as opportunities, not tragedies.

For example, on Oct. 1 (just a few weeks ago) the Dow Jones plunged 238 points as Wall Street agonized over the struggling European economy and Ebola fears. The next day the Oracle of Omaha appeared on CNBC and proudly announced that he’d snapped up stocks during the pullback. Or perhaps even more famously, Warren Buffett and Berkshire Hathaway rode in to help investment bank Goldman Sachs (GS) during the 2008 meltdown and not only wound up with a massive stake in the bank as it rebounded, but was paid a cool $500 million in dividends annually from his investment.

The best investors like Warren Buffett refuse to succumb to groupthink. If you can begin to see the whipsaws of the stock market as opportunities, not setbacks, you’ve got the first trait of legendary investors locked down. This is an excellent thing to keep in mind in October’s tumultuous market.


Just as most companies have “core competencies,” so too do most investors. One of the legendary titans of growth investing, Peter Lynch, famously summarized this with his mantra, “Invest in what you know.”

Lynch embodied his advice in his 13-year career as manager of the Fidelity Magellan Fund (FMAGX), generating average annual returns of 29% between 1977 and 1990.

Lynch was fond of investing in companies he encountered in his day-to-day life, and said he often stumbled across winners during extracurricular activities. There’s absolutely nothing to stop the individual investor from using their own unique skill-set or interests in the same exact way to become one of the richest investors out there.

For example, if you’re a tech geek, you probably see some trends — whether you realize it or not – that Wall Street will be slow to notice. Alternatively, if you’re a mallrat your knowledge of the retail space could help make you a big winner in the stock market. From clothes to food to tech to coupon sites, figure out what your core competency is and cash in.

Be conscious of what you know, and use that to your advantage.



There’s somewhat of a caveat to Peter Lynch’s “invest in what you know” mantra. Just because you yourself are a fan of a particular brand or company, doesn’t necessarily mean others are as well. Lynch first became familiar with Apple (AAPL) in the 1980s when his kids fell in love with their Apple computer. His affinity for Dunkin’ Brands (DNKN) coffee led him to invest in DNKN stock, which ended up being wildly successful.

In both cases, however, Lynch did his due diligence. He loved his job, and would often devote weekends to looking over balance sheets and visiting executives.

None of the best investors of all time made their living by investing halfheartedly or without years of incredibly hard work and research. After all, becoming one of the richest investors out there relies on constant work and not just one or two good trades.

Being passionate about investing and noticing great opportunities wherever they arise is absolutely essential to generating market-crushing returns.


The fourth trait on our list may be the most important, and it’s also arguably the most difficult to implement: patience.

Peter Lynch said most of his big winners came after holding them for three to five years. Similarly, Warren Buffett said in Berkshire’s 1988 annual letter to shareholders that:

“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

1988 was the same year Buffett made his first major investment in Coca-Cola (KO), buying $592 million of KO stock. At the time it was a large percentage of Berkshire’s portfolio. After purchasing additional shares of the soda giant, Berkshire owned 9.1% of Coke stock at the end of 2013. Berkshire’s KO stock was worth more than $16.5 billion, representing a whopping 969% return.

I’d say that whole “buy and hold forever” thing is working out okay for Warren Buffett, and if you want to be one of the best investors you shold follow his lead.


History’s most successful investors don’t shy away from big bets. Risk tolerance, intestinal fortitude, audacity — call it what you will, but the stock market’s biggest winners didn’t become legendary with well-diversified portfolios that simply tracked the market.

While Warren Buffett and Peter Lynch each placed big bets on positions they were confident in, George Soros might be the premier example of a world-famous Wall Street winner who bet the farm and won.

That’s how you become one of the best investors out there.

In 1992 Soros placed a $10 billion bet against England’s pound sterling. Correctly predicting the pound’s subsequent plunge, Soros reportedly made $1 billion in a single day on the trade, and became known simply as “The Man Who Broke the Bank of England.”

If you want to be one of the best investors in the world, you have to have the confidence that your hard work and knowledge will pay off.


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