Investment Lessons to Learn From Bigshots
Tuning into experts’ speak for achieving financial goals
The art of building wealth is not without grey areas. Do not let imprudence and indecision sway you while testing the waters.
Awareness and Knowledge: You may invest in stocks, real estate, funds, automobiles etc. every time you come across someone screaming “exciting opportunities.” This is where investment can go haywire if you pour capital out of peer pressure or irrational optimism. Often, investors tend to get carried away by the success of one investment sphere, and they intuitively invest in other avenues by hastily applying the previous strategies that proved successful. Well, it will not fly! While you may fall back on your relevant investment experiences to construe a future, willy-nilly generalising failure and success across all the different investment spheres is a blunder.
Patience and Consistency: An understated investment skill, patience will help you stay focused and rooted to quality investments to wade through the tough times. Pulling out from a market stumbling miserably might appear prudent initially, but the feeling may wane since amassing profit by timing the market requires luck. Often, you tend to lose out on lucrative opportunities waiting for the price to plummet. Impatient decisions result in immeasurable capital losses and jeopardise your long-term gains. Even during lengthy, stretched-out volatile times with markets failing invariably, successful investors always suggest focusing on the bigger picture, reckoning that volatility is part of investment and staying on track, possibly by consulting a trusted financial professional.
Diversification: With diversification, you minimise risk and fortify the security of hard-earned capital investment. By diversifying you protect the investments that are vulnerable to market risks and stagnation. Since diversification is not a one-time task, you should always be going through your portfolio to sort out changes if and when the risk level is highly inconsistent you’re your financial goals. Investors always swear by investments with varying returns and risks.
Taxes: Tax-smart investment planning is a paradigm of wise investment decisions and as Benjamin Franklin has said, “nothing can be said to be certain, except death and taxes.” Also, tax saving schemes may appeal to you, but dig deeper to know at length the many sketchy areas the terms and conditions cover. Determine your tax bracket from early on to avoid paying a bulk throughout the different stages of an investment—contribution phase, income amassing phase and withdrawal phase. Your focus should be on investments that are capable of generating maximum value even after tax returns.