8 pearls of wisdom for investors

There’s a lot of investment guidance out there. Too much can be overwhelming. So, how can you cut through the noise and find what you need? To help you out, we’ve put together a cut out and keep 8-step guide to successful investing.

The list includes tips on how to manage your portfolio effectively – covering everything from diversification to saving tax efficiently – to help you build, manage and grow your investments with confidence and ease.

Stay invested

This may seem like an obvious tip but actually time in the market is more important than timing the market. We recommend you drip feed money into the market through regular investing.

Learn about staying invested in volatile times.

Be diversified

Assets respond differently to the same events. Maintaining a diversified portfolio across different asset classes, sectors and geographies may provide a smoother ride.

Learn about diversification and asset allocation.

Look ahead

It’s hard to not react to the headlines, especially when they’re gloomy. But remember that the market moves before the economy.

Investors don’t wait for the dawn to break, so don’t become more bearish as the market falls – instead it is preferable to be fully invested, ahead of the upturn.

Learn about strategies for long term investing.

Get started

Time matters more than how much you save. Investing in your twenties is supercharged compared to your fifties. An investor who hesitates for even a handful of years is unlikely to ever catch up with their more prudent friends who get on with it. The early starter can even stop contributing in later years and still end up with a bigger pot.

Learn about timing the market.

Every cent counts

There’s power in small amounts. Developing the habit of regular investing is more important than how much you can save.

Learn more about the benefits of regular investing.

Take the right risks

Risk is rewarded in the long run. For example, the evidence of the last 120 years or so is that shares outperform bonds and cash over long periods. Over 18 years or longer shares have never underperformed other assets so if time is on your side then give yourself the best chance by taking sensible risks.

Learn about how markets recover in the long term.

Know yourself

Invest when it feels hardest. Don’t follow the crowd. Be fearful when others are greedy and greedy when others are fearful. The best investment returns can be achieved when you swim against the tide, investing when most people are too anxious to do so.

What does Tom Stevenson wish he’d known about investing at 30?

Make the market work for you

Volatility is not the same as risk. Short term fluctuations are irrelevant as long as you intend to remain invested. What matters is when you crystallise a loss or a gain. Volatility creates opportunity.

Learn more about investing through volatility.

Reproduced with permission of Fidelity Australia. This article was originally published at https://www.fidelity.com.au/insights/investment-articles/8-pearls-of-wisdom-for-investors/

This document has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information. You should also consider the relevant Product Disclosure Statements (“PDS”) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading it from our website at www.fidelity.com.au. This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. This document is intended as general information only. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity Australia’s managed investment schemes is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. Reference to ($) are in Australian dollars unless stated otherwise.
© 2022. FIL Responsible Entity (Australia) Limited.

This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

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