Don’t experiment with your investments

Product providers may lure Investors with the promise of glittering returns and market out performance. In reality only a few will achieve this. I believe investors are better served aiming for realistic and consistent long-term investment returns.

What is a reasonable goal for your investments? The answer for many investors is market returns aligned with their risk profile.

Understanding your personal risk profile is the cornerstone of constructing a suitable long-term investment portfolio.

Conversely numerous academic studies have shown that aggressive strategy is chasing returns and the latest ‘hot stocks’ very rarely beat the market.

Mistakes reduce investment returns.

Aiming for market returns is a good starting point when building wealth. Deciding which markets to invest in is also essential. In considering the returns of a diversified portfolio of worldwide stocks-losses have been rare with investment horizon is of at least 10 years.

Stick to your investment strategy.

Most investors make mistakes because they think they can beat the market. They take inappropriate risks, invest in products they do not fully understand, make hasty decisions when stocks experience sharp swings, and they pay too much in fees. These missteps hurt your investment returns.

You can be more successful with your investments by avoiding common pitfalls. I recommend:

Perseverance

Define your long-term investment strategy carefully and stick to it. Your strategy must be tailored to your goals and objectives, risk profile and time horizons.

Investment selection

Know what you are buying and understand it thoroughly. Index funds and ETFs may offer transparency, low costs and close to market performance for the index that they aim to replicate. There are over 1200 ETFs available in the UK. Being spoilt for choice can be challenging, as not all will be suitable for you.

Diversification is also a key consideration when choosing a range of complimentary investments to build a portfolio. Expert advice may be required.

Review regularly.

Review your wrist profile at least annually, or whenever there is a change in your financial or personal circumstances. You may need to rebalance your portfolio to adjust different asset class weightings back to your long-term strategy possibly with expert help.

Want to boost your long term investment? Book a free no obligation review of your current investments Calendly – Marc Burman