Your principles can help you make better investment decisions
Investment decisions are often not black and white. The path you take with your money may not be as clear and you may end up regretting the decisions you made.
Sounds familiar?
So how do you navigate the endless decisions you have to make with your money when the world can seem so chaotic? More importantly, how can you be confident in your decisions no matter what happens to your money in the short term (less than five years)? The answer: develop your investment principles!
Just as personal values help you make decisions in life, principles help you make investment decisions when the answer isn't obvious. The problem is that most investors do not have documented investment principles. In fact, we've never seen it. Not in the almost thirty years that we have been in this business. Even worse, most investors don't track their performance, risk, fees or the tax impact of their decisions. They literally fly through their pockets "hoping" for a great result.
Individual investors tend to "wing it," basing their investment decisions on which investments performed best over the most recent 1, 3, or 5-year period (big mistake, by the way).
It does not work in practice to base investment decisions on past performance in which you would have liked to invest. Yet investors do it all the time. (Not you of course 😊)
So, where do you start?
At Expat Beleggen, we recommend that you start by establishing investment principles based on sound academic evidence, rather than the latest headlines. By adhering to documented principles, you may be able to better navigate market fluctuations, minimize risk, and maximize your long-term returns. In fact, you can be more confident in your approach, no matter what the world throws at you. That provides mental clarity and the ability to focus on what really matters: life, family and the pursuit of happiness.
Next time you make an investment decision, ask yourself: Which of my principles am I basing my decision on?