Plan, plan and plan again is the basis of investing
Investing isn’t a short-term pick-a-stock, pick-a-market game that’s measured over days or weeks or even months. Instead, the secret is to plan ahead, to remain measured and consider investments over periods of at least a decade – that was the overarching advice given by our three experts – David Kingston, Chris Johns and Michael McCarthy – as they outlined the practical tips that they’d picked up over many years in the investment industry.
David, a former insurance company CEO, gave an honest appraisal of his time, acknowledging the mistakes he’d made, the acceptance of which he believes is critical to being able to invest successfully. Since investing for the future is about having superior knowledge to others in the market, one of the key steps to take is to identify where you yourself might have that knowledge, or identify, and access, others who do. Don’t try and beat the market without that edge.
Chris, who was a senior investment manager and started out as an economist, noted the importance of investing carefully and asking pertinent questions. His key focus was on the troublesome paradoxes of investing. While investing is about the future, forecasting successfully is nigh on impossible; while most of us claim to consider the long-term – where most of the gains in investing are harvested – human nature ever drives us to be short-term in our thinking. The best way to overcome all of this is to focus on your future investing needs, reduce costs, stick to your plan and avoid trying to manage investments from day to day.
Michael, an actuary and former investment manager, had a baptism of fire when he started out in the sector, joining just two months before the 1970s oil-crisis driven bear market that left an indelible mark on him. The good news is that bear markets don’t last forever but, to get you through the uncertainty, you need to have a long-term investment horizon and the ability and capacity to be able to absorb short-term losses.
In short, investing – looking into the future – by its very nature is uncertain. Another key attribute of any successful portfolio is diversification. The past tells us that over the long-term equities have risen in value and are but one component. Take advice, plan for your particular needs and set your goals over the long-term and invest accordingly. But this approach takes time and time is our most undervalued commodity. Make the most of yours by using the money you’ve worked so hard for to finance what really matters to you.
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Acuvest is a privately owned independent Irish investment advisory business serving both institutional and private clients with €3.5bn of assets and impacting the lives of over 40,000 households. For more market analysis and expertise follow Acuvest’s updates on Twitter @AcuvestIreland and LinkedIn.