Achieve Better Investment Outcomes

Amyr Rocha Lima

3 min read

Investing for retirement can seem daunting with so many options available and constant news updates on the latest market trends.

But, in theory, being a successful investor is simple: spend less than you earn, invest the difference, and withdraw what you require in retirement. Easy, right?

Well, not quite.

In practice, investing can be challenging, especially when you have to navigate the emotional turmoil of crises and uncertain times. As Benjamin Graham, mentor to the world's greatest investor Warren Buffet, famously said, "The investor's chief problem, and even his worst enemy, is likely to be himself."

The good news is that you don't have to be an expert to be a successful investor. A few simple actions can help you reduce the noise you're exposed to, placing the odds in your favour. For example, limit your exposure to news alerts and expert opinions, and focus on the long-term investment strategy.

When you find yourself in the middle of a crisis, it's important to remember that each crisis has its own name and unique characteristics, but they are essentially all the same. The emotional challenge of acting rationally under uncertainty is a defining characteristic of successful investors. Knowing that patience and discipline are required for investment success is one thing, but experiencing it during a crisis is another.

Reflecting on your past as an investor can be helpful in reminding yourself of your own unique history of good behaviour during difficult times. Investing is not one long cognitive challenge but, rather, a series of intermittent behavioural challenges. The real winners are those who remain invested, even during market declines.

It's important to remember that crises are unlikely to matter in three decades, and you likely won't remember most of them in three years' time. Markets have been resilient through every type of crisis, and while we can't prove anything about the future, we can look to the past and take comfort in the fact that humans and markets have been resilient.

Final Thoughts

Being a successful investor is simple in theory, but challenging in practice.

Remember to focus on the long-term investment strategy, limit your exposure to news alerts and expert opinions, and reflect on your past as an investor. Despite the emotional challenges, the real winners are those who remain invested, even during market declines.

So, take a deep breath, stay disciplined, and invest for your future with confidence.

For a more detailed discussion on this topic, please feel free to contact us. Our team are always available to answer your questions and to help you with any of your financial planning needs. Here’s what we offer: A cup of coffee… and a second opinion.

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