Formula for success in investment

NOWADAYS, with e-mail, Internet and the ease of accessing information, there is an information overload and one cannot blame investors for not knowing what to do.

NOWADAYS, with e-mail, Internet and the ease of accessing information, there is an information overload and one cannot blame investors for not knowing what to do.

Bear in mind that in many cases investment decisions are not based on fundamentals but on how investors feel - negative or positive.

This is dangerous as one makes an emotional decision and is sidetracked from your original investment fundamentals and goals.

T he question is - how do I avoid all the confusion and conflicting opinions on investments?

In order to do this it is imperative that you find a strategy that removes all the short-term information from the equation.

The basic formula for a successful investment experience can be summarised as follows:

l Have a well-defined investment strategy based on a diversified portfolio of funds.

l Keep your expectations real.

l Make only educated financial and investment decisions with the support of an experienced investment advisor.

Understanding the volatility of markets falling and recovering in quick succession as well as the fact that markets can stay down for long periods of time must form part of your planning.

It is during these times that your investment strategy, instead of your emotions, must dictate your actions.

Vitally important is that one needs to know what one's risk tolerance is. This risk tolerance goes hand in hand with your time horizons because the younger you are the greater risk you can afford to take.

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