Investment decisions that stand test of time

WITH both the global and local environments remaining uncertain, it is even more important to create as much stability as possible in areas you can control.

Below are some resolutions to follow for another successful year of investing.

I will understand that financial solutions need to be part of a holistic plan.

We are often tempted to believe that finding that one silver bullet will finally solve our financial puzzle.

“I just need to pick the next big thing to secure my financial success,” the thinking goes.

The reality is that in an uncertain world, silver bullets are few and far between, and simple solutions are more likely rooted in optimism than reality.

The aim is to find investment solutions that fit holistically into your plan and that will be able to stand the test of time.

I will remember that financial solutions are not absolute.

In a complex world, we should expect our solutions to be nuanced and, most importantly, to change over time – as we do.

Reviewing your portfolio regularly to ensure that it still meets your requirements is not only good financial planning practice, it is also an absolute necessity in a global village where events around the world can directly affect your financial situation.

It is highly unlikely that even the most detailed financial plan from 20 years ago would still suit your needs today.

Achieving financial well-being is not a once-off task, but rather one that requires ongoing maintenance as your personal situation changes.

I will remember risk is not always what it appears to be.

When it comes to investments, understanding, quantifying and managing risk is not negotiable and is a necessary first step in the process of achieving long-term success.

Avoiding an investment like equities, for example, because this asset class is volatile in the short-term, can be a very poor decision from a long-term perspective.

When it comes to managing risk, always make sure you consider your time-horizon, and ask how this investment will behave as part of a balanced portfolio.

I know there is no such thing as an impossible goal.

Sometimes, our financial challenges seem so unattainable, we give up even before we begin. Saving for retirement may be a case in point.

The reality is that achieving any plan, no matter how grandiose or unlikely it may seem, starts with quantifying how much you’ll need and by when.

Often, seemingly impossible targets just mean we have to try harder and work harder.

In the long-term, the power of markets and compounding work in your favour helping you achieve your goals – provided you have the patience to remain invested. ý I will commit to seeing the bigger picture. It is often difficult to avoid being caught up in the emotions of the markets.

However, emotions are a poor guide to making sound decisions.

What you need is proper research and a clear head. When the world seems to be an increasingly uncertain place, having support on your side can really make all the difference to the investment outcomes you achieve.

A financial adviser can help you navigate the investment landscape by providing a sounding board and helping you to view your decisions objectively.

It is only with the benefit of a broader perspective and a clear head that we can make investment decisions that will stand the test of time.