The 9 golden rules of investing
- Mo Shouman
- Jun 28, 2024
- 2 min read
Updated: Mar 13
While markets are performing well it’s easy to sit back and watch investments rise in value. However, it’s a different story when markets are not performing so well and uncertainty abounds. Holding your nerve is not easy. So how do experienced investment advisors handle this? Here are nine tips:
RECOGNISE THE CYCLE: Financial markets are all prone to move in cycles. Sometimes the troughs feel like they will last forever but they do eventually end and move on to higher levels.
DIVERSIFY: One of the most important rules for successful investing. Diversify across asset classes, markets, geographical regions, managers or companies.
AVOID CROWDS: The worst time to invest is when everyone else is rushing in. Become a contrarian investor whilst still applying fundamental quality tests.
BUY AND HOLD: Buy quality investments and hold them - at least until they have had time to achieve their expected return. Very few investors make money through speculating.
THIS TIME IS NOT DIFFERENT: When the market goes dramatically up or down there is a tendency to cry “this time it's different”. This time is definitely not different.
Don't be SWAYED by high returns: Don’t chase last year’s winners – look for this year’s opportunities.
Invest regularly: Implement a disciplined savings plan often referred to as “Dollar Cost Averaging” – a little bit often can build up to a lot.
Consider tax implications: If you are a wealth builder, seek capital gains in preference to income. If you need income, investigate different structures that help to minimise tax.
Have a regular checkup: Review your investments and strategy on a regular basis. Work with a professional financial adviser who will help you achieve your objectives.
I hope you found this article beneficial. I’m Mo Shouman, a financial adviser with 20 years of experience helping professionals save on tax and grow their wealth. Book your financial clarity meeting below and discover how you can take your finances to the next level. I’m proud to be the only adviser who provides a detailed assessment of your financial position—whether you decide to work with me or not!