Brexit. Are you a smart investor or the sit and wait type?
We have known for quite some time, the decision to leave the European Union (Brexit) would have an impact on currency and stock market holdings. However, there is one financial sector which will thrive as a result, the bond market.As is always the case when there is economic uncertainty, shrewd investors seek out safe havens while markets stabilise. The current trend is to strengthen your portfolio with the security that bonds offer. This is opposed to the volatility and uncertainty of other investment classes, such as equities, commodities and Forex (FX).Smart investor will take stock of their position and put in place the best strategy to protect their portfolio. This requires investors to be proactive, rather than stand on the outside looking in. For the masses, they pause. They Standstill. Sit and wait.Take a look at a recent article from the Telegraph business section, it makes for very interesting reading on how best to protect against Brexit. CLICK HEREBonds have always been a popular investment for British investors as they provide investors with a regular income, they are also seen as a very important addition to balance out and diversify an investment portfolio. Overseas investors will also see this as a great opportunity to take advantage of the pound. Take a look at diversifying your portfolio HERE
Of the mistakes made by investors, several of them are repeat offenses. The same mistakes being made over and over. After a few alarming prospective client calls recently, it reinforced our opinion that these types of mistakes need to be eradicated by investors.
1 Not listening
Now be honest investors. Have you ever had someone explain something to you but you have already switched off. You’re not listening for whatever reason? Investors are looking for the best investment opportunities but if you don’t listen to the explanation then how can you know from just a headline? Experience has taught me that sometimes you gain more from listening than you do from speaking.
2 Unreasonable expectations
Looking for the highest rate of return as the main reason for investing is maybe not the best starting point. What is your reason for selecting an investment after all? Understanding the structure or business model? Looking at what conditions could affect the investment? Prefer something offering a lower risk or a form of security in the event that something could go wrong to give you more comfort? Having a reasonable outlook may help you when looking for something that suits you. This leads me to point 3!
3 Understanding your own profile
Do you know how much you can afford to invest? Are you a speculative investor or do you prefer a low risk investment? Understanding yourself is a good point to start when you plan to invest. If you know what you are looking for it’s harder for someone to sway you in a different direction. A very wise man always said if you don’t know what you’re doing then why are you doing it? Invest in yourself first as it’s the most important investment decision you could make.
4 Making emotional rather than informed decisions
Knowledge is power someone once told me and I tend to agree with this. I was always taught to learn from people that know more than me. Take their knowledge and feed my own. So if someone understands an investment product, has been trained or has relevant information not on the brochure, it’s more likely to benefit an investor to take in this information so that an informed decision can be made rather than emotional one.
5 Taking responsibility
It’s your investment choice so be responsible. It’s your own capital so before you invest it, make sure you understand what is being presented to you. If you don’t understand then ask the question. Maybe you want to meet up with company. Is a telephone call enough for you? Everyone is different but taking responsibility could eradicate some of the common mistakes in investing. Investors who recognise and eradicate these common mistakes give themselves a greater chance of meeting their investment goals and being profitable and successful. Isn’t that the reason you invest?