If your investments are going to realise their full potential, you will need to familiarise yourself with financial jargon and make the most of the services available to you. There are many dos and don’ts and this investment advice for entrepreneurs could seriously enhance your wealth.
Do...
...use the services of the experts even if you have to pay. That extra cost can pay for itself many times over through improved long-term returns. Financial advisers and risk assessment experts like APT (www.sungard.com/APT) will help you to mitigate risks whilst maximising returns.
Don’t...
...let emotional attachments convince you to keep investing in anything that is no longer performing well.
Do...
...invest for the long term. The frequent and inevitable fluctuations in the market may sometimes be worrying, but over the long term the peaks and troughs should balance out.
Don’t...
...believe you can time the markets and trade short-term. The equity market, in particular, has taught numerous investors the risks of this approach! There is rarely such a thing as a quick buck when investing.
Do...
...make regular investments rather than invest in splurges if you wish to take advantage of cost averaging. You should invest evenly rather than be swayed by the market’s ebbs and flows. Remember those more costly investments you made when prices were high will be balanced out by cheaper assets you acquired when prices were low.
Don’t...
...make decisions in a rush to follow the crowd who are investing in the so-called Next Big Thing. Whatever investments you choose, take your time and make an informed decision. If successful investing was as easy as following the latest trends then everyone would be rich.
Do...
...understand what you are investing in and how to invest before you begin. Always make sure you are clued-up about your investments even if you trust your money to someone else to invest for you.
Don’t...
...place too many eggs in one basket. Diversification is the key to successful investing and helps you to achieve acceptable risk metrics across industries, asset classes, economies and markets. That rising asset class may cry out for more investment - but remember it will fall at some point and you need to manage your risk exposure. Time and time again it can be seen that the main driver of long-term investment success is a diverse asset allocation.
Do...
...ensure you are clear about your financial situation, risk tolerance and financial goals before you start investing.
Don’t...
...assume that the investment strategy you started with will suit you forever. You need to review your portfolio regularly to factor in changes to your financial circumstances and life.
