As much as we dislike the idea of New Year’s resolutions, January can bring with it a welcome burst of drive and energy to try and improve things from the previous year.
When it comes to improving your investments, instead of focussing on maximising returns (which is never fully in our control), try focussing on the way you invest.
Try out these four tips to unleash your best inner investor yet in 2020:
Grow your patience
A successful day-trader once said that his training in order to excel at foreign exchange trading was to go each day to the post office at its busiest, with snaking queues and interminable waits. Once he was at last at the front of the queue, he would go to the back and start it all again. This, he said, prepared him to deal with the market better than anything else!
Often, it is our emotions which blind us to rational good sense and, in turn, cause us costly mistakes with our investments. If there’s one thing to learn in 2020 that will help your portfolio, it’s patience and control over such emotions.
Grow your network
The investors specialising in real estate have known this for years: effective networking can lead to effective investing.
We often imagine investment as a solitary affair played out between you and your laptop in an office, or perhaps at 3am at home. Sometimes it’s one on one with your adviser or some such other important party. Actually, the most successful investors are often very successful networkers.
What investors forget is that sometimes the golden rules of business and leadership also apply to investing. Learning is growth and learning is improvement, so why not seek out opportunities to meet with other investors and genuinely ask them why they do what do and try to learn from them?
If you’re thinking of investing more heavily into software companies in the new year, why not seek out meetings with software experts who think differently to you? And different financial professionals or investors who have been in the game longer than you have? If you want to invest differently, speaking to people who think differently is a savvy idea!
A broad mind and a constantly educated mind is a sharp one, and sharp-minded investors make good investment decisions.
Grow your knowledge
Make 2020 your year to find out about an asset class or types of funds you don’t know much about yet… Your goal will not be to move your money into these classes, but to understand your current choices better.
Most investors have varying degrees of knowledge about one or two (sometimes three) asset classes that they ‘believe in’ and tend to avoid everything else. Sometimes these investors know a lot and do very well – but a special sort of knowledge comes to the man or woman who understands how asset classes fit together in certain environments, exactly why some shine when they do and why others falter.
Growing your knowledge base can also include reading very widely and intently on a sector, company or stock you plan on investing in for months before you commit a single cent. It’s an empowering feeling, and guess what? You’re in good company. This is exactly how Warren Buffet allegedly invests.
Grow your vision
For the kind of long-term goals most investors are aiming for, such as retirement and future children’s university fees, long-term vision is vital. Simply keeping abreast with the recent few years is like taking a sprinter and expecting them to win the Comrades Marathon.
January is ideal list-making time, so make a list of exactly what you’d like your money to do for you in ten, twenty, thirty and forty years’ time, as well as after your retirement and even your death. Also, what exactly would you like your portfolio to look like.
This helps you articulate meaning for your money.
Only once you know precisely what you want can your portfolio be uniquely designed around that and measured in your terms of what success looks like.
Try out even one of these tips for longer than a couple of months, and it’s guaranteed to change your life as well as your portfolio. Now that’s worth investing in.