Investing – Your Investment Strategy
It’s vital that you have a clear understanding of what you’re actually aiming for by investing. Your objectives will directly affect the type and proportion (or asset allocation) of investments you make, the time frame you’re working towards, the total amount you should invest and the rate of return you should aim for. If you’re unsure, seek expert help.
Factored into your strategy will be your tolerance of investment risk and, accordingly, the degree to which you’ll need to diversify to cover risk. Your attitude towards risk, or your “investment profile”, will have a significant bearing on asset allocation within your investment portfolio.
Once you’ve established your investment strategy, stick with it – and stick with the investments and the timeframe that you’ve selected to fit your strategy. Avoid the temptation of bailing out if you see the value of investments fall unexpectedly. Equally, avoid the temptation of withdrawing from your investments if they experience an attractive short-term gain in value. Investment specialists advise that achieving the desired result from your portfolio requires a generous dose of both patience and discipline!
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