Here are 5 tips from the very best of them all – Warren Buffett.
During the course of your investment lifetime you will see many things – wars, economic downturns, political and financial crises, volatile markets etc. But you should know that over the course of time markets can and always have recoverd to new and higher levels.
Anyone Can Do It
Most fund managers are highly intelligent and qualified to do their job (I am guessing). However, most fund managers can’t beat a monkey at picking stocks and shares. Successful investing can come down to having confidence in the strategy you employ, as long as it’s a good one that makes sense of course.
The holding period for your portfolio is potentially forever. If you have investments now that you will hold at least some of until you die, then pass these on to your beneficiaries, who may do the same then they could stay invested forever, in theory. So why panic or get too excited when your investments fall or rise in value? Relax, enjoy your life and let them do what they do.
Do not make Emotional Decisions
As fun as investing can be, in all honesty my experience is that the less fun you can have then the better you will do. Taking emotions out of your decision making process (made easier by outsourcing the process to your financial planner?) will afford you the benefit of making better decisions.
Do Not Listen to The Noise and Excitement
This really follows on from the point above. Changing your mind too often, hopping from fund to fund, investing in things that other people are talking about, listening to people that have no choice but to fill column inches with something is all hazardous material in the mind of an investor. Not only does this cost more money to carry out, it also means you could be following the herd mentality, which is to buy high and sell low. Too many people get in when it is hot (high) and then panic and sell when it is not (low). That’s not how you make money folks.