When it comes to investing we are often our greatest enemy.
When things are going well we are happy and like to keep things as they are but when are going badly we get fearful and often make bad choices.
This is often referred to as the “sheep mentality”. If everyone is moving into this paddock I better not miss out and similarly if everyone is leaving.
Why is this a bad thing, you will most likely make the biggest loss as you will get out when things are down rather than at a suitable time for your situation.
The biggest ways around this are to have a plan and know what your aims are. Keep to your plan, don’t start changing your mind just because you see a particular share or investment having a poorer return than others. Discipline and patience is everything with accumulating assets for the long term.
Know what you are investing in and why. If you are investing in growth assets know the cyclical ups and downs are most likely going to need 5-7 years minimum to ride out the volatility. Give them that sort of time before you start to panic.
If you invested in good quality investments with a proven track record have faith in your original investment decision. You made a well thought out and researched decision.
In some ways the old superannuation defined benefit schemes where you didn’t have any impact on the investment decisions were certainly a good way to go as you couldn’t do anything about it so you never worried or made poor decisions.
You will never be able to time the markets up and downs. It is time in the market that counts and ensuring that you understand and are comfortable with your investments.
If you would like to discuss your investments or choices, the staff at Ritchie Advice would be more than happy to help.
This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided in this article is general advice only.
Ritchie Advice Pty Ltd ABN 12 150 128 448, is a Corporate Authorised Representative 408050 of Dover Financial Advisers Pty Ltd, Australian Financial Services Licensee No. 307248.
Erin Press
