07 5440 5794
SCHEDULE A CALL
wetalkmoney
  • Home
  • Approach
  • Services
  • About
  • News & Insights
  • Contact
  • Home
  • Approach
  • Services
  • About
  • News & Insights
  • Contact

31/7/2018

Top 10 investment tips

 
The media would have you believe that a successful investment experience comes from picking stocks, timing your entry and exit points, making accurate predictions and outguessing the market. 

Is there a better way?
It's true that some people do get lucky by making bets on certain stocks and sectors or getting in or out at the right time or correctly guessing movements in interest rates or currencies. But depending on luck is simply not a sustainable strategy.

The alternative approach to investment may not sound as exciting, but is also a lot more reliable and a lot less work.  It means reducing as far as possible the influence of fortune, taking a long-term view and starting with your own needs and risk appetite.

Of course, risk can never be completely eliminated and there are no guarantees about anything in life. But you can increase your chances of a successful investment experience if you keep these 10 guidelines in mind:

  1. Let the market work for you. Prices of securities in competitive financial markets represent the collective judgment of millions of investors based on current information. So, instead of second guessing the market, work with it.
  2. Investment is not speculation. What is promoted in the media as investment is often just speculation. It's about making short-term and concentrated bets. Few people succeed this way, particularly after you take fees into account.
  3. Take a long-term view. Over time, capital markets provide a positive rate of return. As an investor risking your capital, you have a right to the share of that wealth. But keep in mind, the return is not there every day, month or year.
  4. Consider the drivers of returns. Differences in returns are explained by certain dimensions identified by academic research as pervasive, persistent and robust. So it makes sense to build portfolios around these.
  5. Practise smart diversification. A sound portfolio doesn't just capture reliable sources of expected return. It reduces unnecessary risks like holding too few stocks, sectors or countries. Diversification helps to overcome that.
  6. Avoid market timing. You never know which markets will be the best performers from year to year. Being well diversified means you're positioned to capture the returns whenever and wherever they appear.
  7. Manage your emotions. People who let their emotions dictate their decisions can end up buying at the top when greed is dominant and selling at the bottom when fear takes over. The alternative is to remain realistic.
  8. Look beyond the headlines. The media is by necessity focused on the short term. This can give you a distorted impression of the market. Keep up with the news by all means, but you don't have to act on it.
  9. Keep costs low. Day to day moves in the market are temporary, but costs are permanent. Over time, they can put a real dent in your wealth plans. That's why it makes sense to be mindful of fees and expenses.
  10. Focus on what you can control. You have no control over the markets, but in consultation with advisor acting in your interests you can create a low-cost, diversified portfolio that matches your needs and risk tolerance.
That's the whole story in a nutshell. Investment is really not that complicated. In fact, the more complicated that people make it sound the more you should be sceptical.

The truth is markets are so competitive that you can save yourself much time, trouble and expense by letting them work for you. That means structuring a portfolio across the broad dimensions of return, being mindful of cost and focusing on your own needs and circumstances, not what the media is trying to sell you.

Picture

Disclaimer
This article and opinion is based on generally available information and is not intended to provide you with specific financial advice or take into account your objectives, financial situation or needs. You should consider obtaining financial, tax or accounting advice on whether this information is suitable for your circumstances. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. See full Terms and Conditions here.
Anonymous
8/8/2015 10:57:19 am

but what investments should i make?

#moremoney
18/8/2015 10:42:54 am

These are good. I've signed up for a couple of share trading websites where they give tips. The returns I get are never what they claim I should get.


Comments are closed.
    Get Our Updates

    Author

    FPA Awards - Tony Sandercock CFP - Certified Financial Planner of the Year 2016
    Picture
    The Huffington Post
    The Sydney Morning Herald
    The Age
    Picture
    Money and Life Magazine
    Brisbane Times
    PS News
    Starts at 60
    Seniors Newspaper

    Categories

    All
    Advice
    Behaviours
    Cashflow
    Debt
    Fun
    Insurance
    Investment
    Motivation & Opportunity
    Planning
    Retirement
    Saving
    Strategy
    Tax
    Wills And Estates


    RSS Feed

wetalkmoney logo
Contact Us
Get Updates

wetalkmoney © 2020 - Terms and Conditions  - General Advice Warning - Financial Services Guide - Privacy​

Anthony Sandercock (AR 287974) and TTLB Investments Pty Ltd T/A wetalkmoney (CAR 467267) are authorised representatives of
Boston Reed Pty Ltd AFSL 225738 ABN 89 091 004 885