Smart Investing
About the author:
- Author name:
- By Terri Bradford
- Job title:
- Head of Wealth Management
- Date posted:
- 01 August 2016, 9:59 AM
During times of uncertainty within investment markets long term investors are encouraged to sit tight and ride out any turbulence.
To help you manage your investments through short term market fluctuations we outline our seven golden rules for smart investing:
- Always keep the big picture in mind. If you are investing for the long term avoid rash decisions based on short term volatility. It really does pay to be patient.
- No-one can really successfully time the market. Human nature is such that investors more often than not buy at the top of a market and sell at the bottom. History shows this time and again.
- Stick to the basics of investing. Quality assets have a better chance of recovery through periods of high volatility and uncertainty.
- Maintain a properly diversified portfolio of investments. Diversification of your investment portfolio across all asset sectors allows you to 'hedge your bets'. By spreading your exposure and investing in different sectors you create a portfolio in which you are able to minimise to some degree the losses that may occur in one sector with gains in another. The overall effect is that you moderate the risk and smooth out your investment returns over time.
- Strategic asset allocation has proven to be the most effective method for long term strategies. Combined with optimum rebalancing, a strategic asset allocation will usually be the most effective technique.
- Dollar-cost averaging - buying more shares when prices are low - is a very effective investment strategy. You get 'more bang for your buck'.
- Remember - it's not about market timing and stock selection as they only play minor roles in the long-term performance of your investments. It is about asset allocation, active reviews, seeking professional advice and sticking to your long term strategy.
If you want to discuss your current investment strategy, contact your Morgans adviser.
Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents ("Morgans") do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.
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