avoid. It’s in this kind of market where unscrupulous individuals find vulnerable targets, because who wouldn’t love a 15% guaranteed return right now? It’s more important than ever to do your due diligence before changing tack or making any new investments.
One of the most common complaints these days is, “I could have done better in the bank”. Yes, this might be true from time to time. But remember that you’d need to be incredibly sharp with your timing when it comes to reinvesting in the market (and making up for what you lost in capital gains tax when you sold out of the market). Research shows the average investor’s experience tends to be a lot worse than the market
The best way to wealth is to control the “controllables”. Unfortunately, market performance is not one of them. But your behaviour is. Sticking to a few fundamental rules of investing is the best way to safeguard your savings and maximise your wealth creation efforts over the long term. These include:
◆ Start with a plan and put it down in writing.
◆ Take a long-term view.
◆ Diversify: this way there should always be something in your plan that is working out.
◆ Stick to your plan, but remember that planning is a process. It involves a lot of thinking upfront, but also regular reviews and tweaks along the way.
◆ Enlist the services of a financial adviser. Like a good coach, this person will help you set realistic goals and create a plan to get you there. Over time, they’ll evaluate your progress and adapt the plan if needed. And perhaps most importantly, they will help you overcome the emotional obstacles that threaten to derail your efforts.
Anet Ahern is chief executive of PSG Asset Management.