There are plenty of methods you can use to find stocks that will earn you big profits. Without one key character trait, however, all the stock picks in the world won't make you a successful investor.

Bear markets change everything
Bull markets are loads of fun for investors. Seeing your net worth rise month after month gives you positive reinforcement to do everything you ought to do: keep doing research on your stocks, keep adding money to your savings, and stick with your best stock ideas. When the market's going up, you'll rarely be tempted to trade in and out of stocks or time the market. Much of the time, that would simply reduce your returns, compared with buying and holding your stocks.

During tough times, though, many investors throw all those good habits out the window. Suddenly, you stop adding money to your investment accounts because you don't want to throw good money after bad. Bad news and ugly outlooks make you stop wanting to follow the stocks you do own, and it's a lot harder to find promising stocks that look like they'll be able to weather an economic storm. Frequent trading also seems like a better idea when stocks aren't doing well -- if only you'd sold a long-held stock, you may think, you could have saved yourself from big losses.

What you need to succeed
Investing during good times is simple. If you find good stocks, sticking with them through thick and thin is the easiest and best move. If the companies you invest in perform well, then you'll usually see immediate rewards as the share price rises with the overall market.

But when a bear market strikes, the key trait you need is discipline. You need the discipline to do your own analysis on the stocks you pick. You need discipline to build conviction in your stock picks, so you'll be able to resist the reflexive impulse to dump your entire portfolio in the face of huge losses. And you need discipline to stop yourself from trying to outguess the market by moving to a short-term trading strategy.

For instance, say that you had used the financial crisis of the summer of 2008 to buy shares of stocks that had fallen between July and the end of September. You could have gotten some attractive bargains, but as it turned out, you still would have seen huge paper losses by the time the market hit its March lows. Take a look at these examples:


Change From July 1 to Sept. 30, 2008

Change From Sept. 30, 2008 to March 9, 2009

Total Return Since Sept. 30, 2008





Whole Foods (NASDAQ:WFMI)




Coach (NYSE:COH)




Nordstrom (NYSE:JWN)




Occidental Petroleum (NYSE:OXY)




Viacom (NYSE:VIA-B)




Texas Instruments (NYSE:TXN)




Source: Capital IQ, a division of Standard and Poor's.

If you didn't have the conviction to stick with smart stock picks despite the market meltdown, then it would've been tough to have the discipline not to sell them after such steep declines. Yet if you had that discipline, you were rewarded with gains that more than made up for your previous losses after the recent market rally. In other words, although you had to work through a period of utterly irrational behavior in the market, the fundamentals behind these stocks eventually asserted themselves again, and share prices rose to reflect those fundamentals.

How to be disciplined
So how can you become a successful investor? Building discipline is a tough thing to do, but experience can be a great teacher. If you successfully avoided panicking over the past year, then you've already passed one monumental test. And even if you did sell some of your holdings at the worst time, don't feel bad -- you'll know better next time, and the desire not to get tricked twice may help prevent you from repeating your mistake.

As easy as it is to click a button and buy a stock, being a successful investor takes a lot more work. With patience and discipline, though, you'll be able to elevate your investing to the next level and find the success you've always dreamed about.

It's a lot easier to maintain a disciplined approach if you own the right stocks. Chuck Saletta knows five companies that should dominate their competition.

Fool contributor Dan Caplinger has discovered that maintaining stock discipline is easier than maintaining pretzel discipline. He doesn't own shares of the companies mentioned in this article. Coach and Whole Foods Market are Motley Fool Stock Advisor selections. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy wants to tell you all its secrets.