01 Oct 5 Elements of Successful Investors by Xeo Lye and Jonathan Quek
I met up with Xeo after completing the interview. He kindly passed me his recently published book, 5 Elements of Successful Investors. He co-authored the book with Jonathan Quek, whom I have interviewed on BigFatPurse too. Well, that’s how small the world is.
I will pick out the main ideas of this book to spur your thinking.
Knowing Your Investment Personality
Xeo believed that an investment strategy must complement an investor’s personality. He noticed many people are going after investment strategies blindly, without first knowing themselves. Hence, the book emphasizes the 4 different types of personalities, illustrated by Fire, Earth, Air and Water.
The best part of the book is that it contains a quiz which aims to find out which element you are.
I took the test and I turned out to be both Earth and Air.
The characteristics of Earth say that I am facts driven, and often numbers based. Less affected by emotions and relatively more conservative than the other elements. The bad side is that I may be slow to react to opportunities because of my skeptical nature. At the same time, the Air element enables me to assess situations and paint possible scenarios that may unfold. As such, I may change my investment rules when situations demand it. However, the bad side is that I may abandon a strategy rashly.
Xeo was quick to say that not one element is a better investor than the other. The key thing is to know your strengths and minimise your weaknesses by leveraging on tools or experts.
Jonathan wrote about the Spirit as the Fifth Element. He did not really define what he meant by spirit but I gathered that it is the willingness to learn investing and instilling the right mindset to investment. Without which, one will not succeed in investment regardless which element he or she is.
Understand the Environment and Know History
Besides the emphasis on personalities, Xeo also explained the importance of the investment environment and the need to know history.
The investment environment is pretty harmful due to the contradictory information in the media and poor advice from inexperienced advisors. Xeo highlighted the importance to discern useful information from the noise, and to find an advisor who can really improve your finances tangibly.
The question is how to pick out useful information from a sea of noises? One way is to dust your history textbook and start revising. He said the current state of affairs are due to major events that have unfolded in the past. Understanding why and how the dominoes fell would give you a good picture of what is likely going to happen.
Reading Xeo’s thoughts gave me the impression that he belongs to the Air element. He is a macro guy and only an Air element is able to do that.
What is your investment personality?
You can also read about the various investment archetypes.