Using the 7 habits of successful investors
Investing and accumulating wealth are no trivial matter, especially when investors are torn between avoiding risk and striving for returns. Seven simple habits can help to accumulate capital calmly and composedly. After all, your money should be working for you, not the other way around.
| Habit no. 1: | Know yourself. | ||
| Be rational. Don’t just follow the crowd and be driven by sentiments. | |||
| Habit no. 2: | Your investment decisions should be governed by “purchasing power preservation” rather than “security”. | ||
| Inflation destroys purchasing power. Investors should stay invested. The biggest risk could be not taking any risk at all! | |||
| Habit no. 3: | The fundamental law of capital investment: Go for risk premiums! | ||
| Successful investors know that they cannot earn risk premiums without taking risks. | |||
| Habit no. 4: | Invest, don’t speculate! | ||
| Strategy beat tactics. Nobody needs to spend all their time tracking price movements and markets to find the right time to get in and out. Invest and put your capital to work over the medium or longer term. | |||
| Habit no. 5: | Make a binding commitment. | ||
| Strategy before tactics – make a strategic asset allocation plan that suits your risk profile. Strategic allocation can help protect against knee-jerk
adjustments to the portfolio that can turn out to be expensive. Diversification – Don’t put all your eggs in one basket. Invest broadly. |
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| Habit no. 6: | Don’t put off till tomorrow what you can do today. | ||
| Benefit from compound interest effect by investing sooner than later. | |||
| Habit no. 7: | Go for active management. | ||
| Active management – rely on experts to earn you alpha and reduce exposure to the deadweight of one-time darlings of the equity market.
Passive management, after all, only maps yesterday’s world. |
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Disclaimer
Information herein is based on sources we believe to be accurate and reliable as at the date it was made. We reserve the right to revise any information herein at any time without notice. No offer or solicitation to buy or sell securities and no investment advice or recommendation is made herein. In making investment decisions, investors should not rely solely on this material but should seek independent professional advice. However, if you choose not to seek professional advice, you should consider the suitability of the product for yourself. Investment involves risks including the possible loss of principal amount invested and risks associated with investment in emerging and less developed markets. Past performance, or any prediction, projection or forecast, is not indicative of future performance. The duplication, publication, extraction, or transmission of the contents, irrespective of the form is not permitted, except for the case of explicit permission by Allianz Global Investors. This publication has not been reviewed by the Monetary Authority of Singapore (MAS). MAS authorisation/recognition is not a recommendation or endorsement. The issuer of this publication is Allianz Global Investors Singapore Limited (79 Robinson Road, #09-03, Singapore 068897, Company Registration No. 199907169Z).
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