Whether you are an experienced investor or a terrified newcomer, understanding that successful investing comes with an understanding of how the "game is played" is critical. Learning the ins and outs of the financial world and your personality as an investor requires time, patience and a willingness to make mistakes.
Successful investing is not a transactional event. It requires a long-term approach and a constantly updated vision of your investment goals. Are you looking to retire in 20 years? Fund college or a new business? Or maybe accomplish all three goals? A good investment portfolio can help you achieve all of these goals.
Read books or take an investment course that deals with modern financial ideas. The people who came up with theories such as portfolio optimization, diversification and market efficiency received their Noble prizes for good reason. Investing is a combination of science (financial fundamentals) and art (qualitative factors). The scientific aspect of finance is a solid place to start and should not be ignored. But science is not everyone's strong suit. There are many book, articles and videos that explain financial concepts in ways that are easy to understand.
Another factor that is frequently ignored is your "Investors Personality". The graph below explains how your personality type may impact your investment strategies.
Investment personality aside, knowing what works in the market an be tricky especially when there are influences that have little to do with the actual market. A simple rule of thumb might be; "Never invest in something that you don't understand". Always sound advice. But if you have the feeling that successful investing is a little more complicated that that, with mysterious forces out of your control, you are not alone.
Peter Atwater, CEO of Financial Insyghts and our next Office Hours Kennett speaker has shaken up the investing world by identifying how investment decisions are frequently made after the horse has left the barn. In other words, we invest on the wrong side of the upward curve.
Check out this short clip as Peter explains his theory. And after you have watched take the time to register today to hear Peter in person at our next Office Hours Kennett on October 24th at The Creamery in Kennett Square, PA.