6 steps to a successful investment journey
GETTING STARTED IN INVESTING
YOU WILL need to prepare yourself for your investment journey. What is your investment goal? Ask yourself questions that define these objectives. Are you looking to retire in 20 years, at age 55? How much money will you need to do this? The plan that you come up with will depend on your investment goals.
KNOW WHAT WORKS IN THE MARKET
Market trends and news are important. Seek out financial reports on companies listed on the stock market. Note what industries are poised for growth and heavy investment. You can even read books or take an investment course. Warren Buffett is one of the most successful investors ever. His simple investment style is summed up in this wellknown quote: ‘Never invest in a business you cannot understand.’ It has served him well.
While he missed the tech upturn, he avoided the subsequent devastating downturn of the high-tech bubble of 2000.
KNOW THYSELF AND SEEK PROFESSIONAL ADVICE
There will be unscrupulous investment professionals and persons you know whose interests may conflict with yours. When in doubt seek a professional, a broker. Professional wealth advisers have more resources, including greater and faster access to information, and technical expertise in interpreting statistics and data.
Individuals sometimes self-sabotage their investments. If you are risk-averse and a wealth preserver, you would be affected far more by large losses that can result from highrisk, high-return investments. Be honest with yourself and identify and modify the factors preventing you from investing successfully or moving you away from your comfort zone.
FIND THE RIGHT INVESTING PATH
Generally, investors adopt one of the following strategies:
• Don’t put all of your eggs in one basket. In other words, diversify.
• Put all of your eggs in one basket, but watch your basket carefully.
• Combine both of these strategies by making tactical bets on a core passive portfolio.
Start with low-risk, diversified portfolios and adapt based on the performance; learn by doing. As you gain knowledge over time, you will be able to make more informed decisions.
INVESTMENT IS BEST FOR THE LONG TERM
Sticking with the optimal long-term strategy may not be the most exciting investing choice. Your chance of success increases if you stay the course without letting your emotions, or ‘false friends’, get the upper hand.
BE WILLING TO LEARN
The market is hard to predict, but you can learn market trends by getting daily, weekly or monthly updates. The Jamaica Stock Exchange website is a great source of information, as it reports the stock market in real time.