6 Principles Of Investing

What are they and how can you do it?

At whatever stage you are at in life and whatever your plans may be, growing your wealth will help you achieve your financial goals. But, when it comes to investing, it’s essential to achieve your returns in the lowest risk environment possible.

Whether you decide to use a financial adviser or attempt to build a portfolio on your own, you should follow some fundamental principles of investing to increase your chances of success.

1. Design a Plan, Then Stick to it

Careful planning has helped most people achieve anything in life, and it’s the same for investing. A robust financial plan and then sticking to it is the key to achieving your goals. Review your plan regularly and make changes where necessary to make sure it stays in line with your objectives.

2. Cash isn’t always king

Keeping your money in cash seems intelligent and safe. However, every second that goes by is technically worth less and less. Emergency cash is necessary, but after that, it’s holding you back from achieving your goals. The further away your goal, the less cash should be used as part of your investment strategy.

3. Diversify, Diversify and Diversify!

Having spent my entire life searching for a crystal ball, I’m pretty sure they don’t exist. This means we cannot predict market movement. If you hold a variety of investments, depending on their correlation, some will go up, and others go down. Generally, we know that markets rise over time, and bonds pay coupons, so diversification and giving the assets time is key. This about the different asset classes, sectors and companies and review things regularly.

4. The Earlier, the Better

Is it better to start saving for retirement in your 20’s or 50’s? That’s correct; the earlier you begin to plan any goal, the more likely it is you will achieve it, and the less it will cost you. In addition, if you start saving for something early, you will fund your goal with growth rather than capital.

5. Don’t Panic

‘Activity bias’, which is the urge to ‘just do something’ in a crisis, is common in the majority of investors. I have heard so many people say, ‘I lost a lot in 2008.’ If you look at the markets for the last 100 years, there are times where they fall, sometimes hard, but they always recover. It is tempting to abandon your plans and sell assets – don’t do it. There will be good times and bad. Investing in bad times means buying assets that are on sale, and everyone loves a good deal.

6. Tailor Your Overall Plan to Your Needs

Every investor’s goals are different but can be broadly categorised into essential needs, lifestyle wants and legacy aspirations. The points above are good general tips; however, it’s always worth exploring hiring a professional who can guide you through the financial minefield and hold you to account. Getting investment advice can be one of the most beneficial things you can do for your finances and long-term financial wellbeing.

Book your 30-minute discovery meeting with Mark, where he will cover topics such as:

How the Offshore Financial services sector operates and how it could be holding you back.
Ways you can increase your current and future cash flow using advanced cash flow modelling techniques.
A comprehensive review of your current investment, tax and protection strategies.
A full review of your current fee schedule.
How the standard asset allocation promoted by most advisers may hinder your progress to becoming wealthy.
Why would using me as your financial coach mean access to the best professionals for your specific needs?
Why being a part of Marks Network' will give you access to opportunities outside of your standard financial planning remit.