9 Golden rules of investing
These are the 9 golden rules of investing to hold on to despite market conditions. While markets are performing well it is easy to sit back and watch investments rise in value. However, it is a different story when markets are not performing so well and uncertainty abounds. Holding your nerve is not easy. So how do experienced investors handle this? Here are 9 tips:
1. Recognise the cycle
Financial cycle are all prone to move in cycles. Sometimes the throughs feel like they will last forever but they do eventually end and move on to higher levels.
2. Diversify
Diversifying is one of the most important rules for successful investing. By diversify across asset classes, markets, geographical regions, managers or companies, your risk is effectively spread out. This might minimise your potential losses and smooth out your investment returns over the longer term.
3. Avoid crowds
The worst time to invest is when everyone else is rushing in. Become a contrarian investor whilst still applying fundamental quality tests.
4. 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.
5. This time is not different
When the market goes dramatically up or down there is a tendency to cry “this time it is different.” This time is definitely not different.
6. Do not be swayed by high returns
Do not chase last years winners instead, look for this year’s opportunities.
7. Invest regularly
Implement a disciplined savings plan often referred to as “Dollar Cost Averaging” – a little bit often can build up to a lot.
8. 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.
9. Have a regular check up
Review your investments and strategy on a regular basis. Work with a professional financial adviser who will help you achieve your goals.
You can also consider investing in a Halal managed fund where experienced portfolio managers will help you manage your investments. At Hejaz, our investments are actively managed to ensure that your investments are compliant and performing. Unlike others, we have an inhouse Islamic investment team we do not outsource this critical function, setting the management of your wealth as our priority.
Visit https://www.hejazfs.com.au/investments/ to learn more about our Islamic investment options or give us a call at 1300 043 529 to talk to our financial adviser about what best suits your situation. Our financial advisers can help you understand your risk comfort level and design an investment strategy that is right for you.