Keep Your Eyes On The Prize
There are a lot of distractions that investors have to contend with… news about interest rates on the rise; the possibility of a housing price crash; reports of a shrinking economy; the latest potential boom area (which is never where you happen to own a home or investment). With so much information, much of it conflicting, it’s easy to become distracted, even confused.
If you’re having trouble staying focused, then these six tips should help to provide some clarity:
1. Keep Your Eyes On The Prize
Every investor needs a goal to work towards. Ideally this would be expressed as a monetary sum, achieved by a time deadline. Once you’ve set your goal it will become the benchmark against which you assess potential acquisitions and disposals.
Put simply, you should buy assets (or redeploy your capital), so that you’re always trying to make the most money, in the quickest time, for the least risk, and the lowest aggravation.
If you don’t have ‘an investing prize’ in mind, it’s easy to get distracted by financial or lifestyle situations that will blow you off course.
Furthermore, when you don’t know what you want, any investment might suffice, or you might decide to hold on to an asset because you don’t know what else to invest in and thus suffer a ‘missed opportunity’ loss.
2. Say No To Noise
It’s important to be informed, but much of what’s written in the press is frankly nonsense. For instance, a few days prior to the US election there was an online article on a major news portal saying that if Trump was elected the Aussie Dollar would quickly exceed 90 US cents. A day or so later, the same site published another article saying if Trump was elected the AUD would fall below 70 US cents.
Rather than falling for a sensationalist headline, find a few people who have a track record of investing success and follow what they’re doing and saying. A tale from the trenches is much more helpful than a rumour from the wires.
3. Measure Up
The best indicator of your asset’s performance is, strangely enough, your asset’s performance! All too often folks are glued to the news when they should be monitoring and measuring how their assets are performing.
Crunching the numbers once a year at tax time is not enough. At a minimum, you should be receiving quarterly reports, and you should be comparing actual against expectation and taking remedial action as needed so you’re always maximising your money.
4. Plan Ahead
Do you have an investing plan for 2017 – something written out that quantifies what you want from your investments and why? If not, why not? Isn’t your financial future important enough for you to want to make a plan rather than winging it?
You don’t need a 10-page business plan (although you could!). A few pages expressing your investing purpose and some performance benchmarking for your portfolio overall and each asset individually is sufficient as a starting point (and a lot more than most ever bother doing).
5. Seek Help!
2017 could be your best year ever, if only you could find a way to overcome your fears, doubts and insecurities. If you’ve got a problem, find someone who might have a solution and ask for their help! You’ll find you’ll be able to run faster if you don’t have to jump unnecessary self-imposed hurdles.
6. Help Someone Else
One of the best ways to learn is to teach someone else. Find a protégé and invest some time and effort improving their lot in life, leaving them feeling touched, moved and/or inspired. You’ll find you’ll be more blessed giving than receiving.
2016 hasn’t ended yet, so spend the remaining few weeks planning, preparing and establishing the best possible platform for unprecedented success in 2017.
You won’t outperform by leaving things to chance!