There is a saying – “Investing is simple but not easy.”

Lately, I have a new revelation on this. 

First, is investing simple? 

To me, I would say yes as I have been investing for years. 

The recipe book is simple: 

  • Find great businesses. 
  • Buy them when they are undervalued. 
  • Hold onto them for the long-term. 


That’s it – My playbook to a 6-figure portfolio. All I do is the basics and dividends continue to pour in. 

But then, the question is: “Why is investing not easy?”. 

As an educator, I wonder this myself. I have spoken to many and gathered many stories of investment follies. Most of them can be avoided if they simply: 

  • Find great businesses.
  • Buy them when they are undervalued. 
  • Hold onto them for the long-term. 


Are these simple principles that difficult to follow?

Initially, my answer was nope. That was until I read “Surrounded by Idiots” authored by Thomas Erikson.  From it, I learnt that each of us have different core behaviours. These behaviours are segregated into 4 colours: Red, Yellow, Green and Blue.


Perhaps, some of you knew about DISC assessment. It’s more or less the same thing. Here, I’ll like to describe for each behaviour trait one key obstacle in investing. Of which, I aim to share one remedy to tackle these challenges. 


1. The Dominant Red

You are fast, efficient and direct. You are decisive and hate wasting time. Essentially, you get things done. 

Because of this, the top question you ask is – “What stock to buy?”.

An efficient answer sounds like: “A Bhd or B Ltd”.

Other than this, you’ll tune out as you deem it as “inefficient”. You simply have no patience. That’s an issue as patience is a virtue in investing. Portfolios are built over time and not in a month or two. 

I know. You might hate this “long-term” talk. You want quick results and you don’t mind taking risks to attain them. That’s why you speculate stocks and Bitcoin. 

Do note this. Your efficiency is a strength at work but a weakness in investing. Impatience and desire for fast results are effective ways to lose money fast. 

Now, there is one bright side for the Red. 

You like taking control. If you want to be successful, you should take full control over your investments. Your homework is to learn and acquire real skills. They include accounting, valuation & portfolio management skills. If you have these skills, you don’t need stock tips from anyone else. 

Such is control, power and full autonomy on how you want to invest yourself. 


2. The Influential Yellow 

You are likeable and a star attraction. Your ability to connect and communicate is amazing. You are a people person. What you like is to have a sense of belonging. What you may hate most is being left out. 

Imagine everyone buys an iPhone and you’re not. Ouch!

For this reason, the Yellow is most susceptible to “Herd Mentality”. 

The Yellow may buy a stock because the “tip” is given by a trusted figure. He could be a family, a friend, a Guru, an award-winning fund manager, … etc. It doesn’t matter if a stock is fundamentally sound or not. What matters is “Do I like or trust the person giving out these tips?”

Plus, you hate data and details. To you, spreadsheets are cold and impersonal. There is no fun in reading annual reports. 

All these factors combined would spell disaster in investing. 

Is there a remedy for the Yellow in investing?

Yes, there is. The remedy for the Yellow is to find a good role model. That’s your homework. 

“Who you listen to” is and will influence how well you do as an investor. 

I can’t tell you who you should listen to. 

Instead, I’ll share that I’m inspired by Buffett when it comes to investing. That’s because I find that he is the best in this business. After all, who else has a US$ 300+ billion equity portfolio? Rather than following friends, family, and influencers, I decided to copy & paste his insights & philosophy when investing. 

I’m sure you can do the same too. But that decision … I’ll leave it to you. 


3. The Steady Green

Your concern is on safety, security and stability. 

Sure, you like to be financially secure. Such security offers great assurance and peace of mind. For this reason, you are conservative. This is very helpful in investing as true investors are risk-averse in nature. 

You might admire the Red for being bold and decisive. You may equate investing success as “high-risk, high-reward”. Probably, you might think why aren’t you a little like that? 

Here’s your homework. 

Throw that thinking into the dumpster. Your need for safety is helpful in long-term portfolio building. There is no need to double or nothing in anything. 

Today, you probably feel that investing is risky. That’s normal as you’re most likely new and inexperienced in investing. So, what you can do is as follows: 

  • Take baby steps. 
  • Learn the basics like simple accounting and valuation. 
  • Start building a small portfolio to gain experiences. 


Focus on small wins. Keep repeating and build your portfolio upwards from there. 

Whatever you do. Remember this – 

It takes a conservative investor to build 6-7 figure portfolios. No need to be “kiasu”. The trick is to take baby steps and have a little “kiasi-ness” inside you. 

One more thing: “Have some confidence in yourself. As long as you progress, you’ll do just fine.” 


4. The Compliant Blue

If you’d followed me for quite some time, you would probably guess it. 

Yes, I’m Blue. 

I study, strategize, analyse, fact-find, calculate, and verify data, information, and other details relevant to any stock before investing. I’m structured, systematic, and almost mechanical. I read recipe books, going from Step 1 to Step 2 … until its completion. 

I admit. I’m a total geek. 

I believe these are qualities that help me tremendously as an investor. 

But, I do have a problem of my own. If you are Blue, you may want things to be “perfect”. That’s how Blue people are more susceptible to “Analysis Paralysis”. 

It leads to multiple problems like: 

  • Can I accept 4.5% in dividend yield when I want at least 5.0% a year?
  • The max P/E Ratio I can accept is 25. But what if the stock’s P/E is 26?


Aiyo. Such pettiness. It is driving the other people: the Red, Yellow and Green totally nuts. 

If you’re Blue, here is your homework. 

Obviously, some professions require great accuracy and precision. This could be engineering, medicine, accounting, software, IT … etc where even the tiniest of decimals can impact the outcome of your work. 

Coming from a Blue, I learnt to chill a bit when it comes to investing. 

If a stock is expected to pay 80 cents in dividends and I receive 78 cents, I’m still happy and thankful about it. 

If I’m looking to buy a stock that is trading at $15.80 and it goes up a little bit to $15.90, okay lah, just get the transaction done and move on. 

If you’re Blue, I think you should be able to follow these principles more easily: 

  • Find great businesses.
  • Buy them when they are undervalued. 
  • Hold onto them for the long-term. 


Hence, you may find it easier to invest and build portfolios. 


Conclusion: 

So, which of the four colours do you belong to? 

The key is to know yourself and appreciate your strengths and weaknesses. This awareness is vital as investing isn’t just maths but also about our behaviour and attributes. 

Here, I’ll list down some common traits that successful investors have:

  • Red: Decisiveness. 
  • Red: Control / Independent Thinking 
  • Yellow: Desire to be Outstanding. 
  • Green: Conservative + Risk-Averse
  • Blue: Systematic, Structured, Analytical. 


If you find yourself lacking any of these traits, you can adopt and train them. 

  • Who says a Red can’t be trained to exercise more patience? 
  • Who says a Yellow can’t learn how to read numbers? 
  • Who says a Green can’t be more decisive in investment matters? 
  • Who says a Blue can’t be a little more flexible in his / her thesis?


Here, if you wish to pick up real skills, which enable me to sift out good quality deals from 1000+ stocks listed in Malaysia and Singapore and more importantly, avoid poor stocks which would cause catastrophic losses in the future, check out our free 1-Hour online webinar training on dividend investing:

Link:
Free Webinar: How to Build a Stock Portfolio that Pay Increasing Dividends?


But, if you are already pretty solid with investing and want to build a Growth-based Portfolio filled with the top 1% companies listed in the United States, check out our free 1-Hour online webinar training on growth investing:

Link:
Online Training: Case Study of 1 Actual Stock that I had Invested in and Why It Doesn’t Take High Risk to Generate High Returns in the Stock Market?


Ian Tai
Ian Tai

Financial Content Machine. Dividend Investor. Produced 500+ Financial Articles featured in KCLau.com in Malaysia and the Fifth Person, Value Invest Asia, and Small Cap Asia in Singapore. Regular Host and Presenter of a Weekly Financial Webinar with KCLau.com. Co-Founded DividendVault.com, an online membership site that empowers retail investors to build a stock portfolio that pays rising dividends year after year in Malaysia and Singapore.

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