Why you should stick to your investment strategy
Stanley Gabriel, Chief Executive Officer at Momentum Investo
Patience is an important quality when you are trying to succeed at something, and investing is no different. It is all about being able to play the waiting game by staying calm and invested. Although investing has become more accessible over the years, thanks to the rise of new digital platforms, sticking to your investments takes a lot of courage whether you are a new or seasoned investor.
According to the Momentum Investments 2021 Sci-Fi report, 50% of investors who switched investments in 2021, did it due to market volatility. Further research has proven that it is best to stay put once you have invested. To keep jumping ship in chasing better returns elsewhere will most likely lead to losing money. You have to change your mindset and stay in the driver’s seat when it comes to your money.
According to Stanley Gabriel, Chief Executive Officer at Momentum Investo, “The start of your investment journey is relatively easy. Being consistent and patient with your investments is more difficult.”
Gabriel cites the words of arguably the most successful investor this side of the 20th century, Warren Buffett, “It is time in the market that counts, not timing the market.”
To this, Gabriel says, “Markets will probably fluctuate, and your returns will probably take a hit, especially in these uncertain times. However, it is at this time that you have to be resilient. The longer you are invested, the higher your returns are likely to be.”
Speaking to the benefits of staying invested, he says, “If you invest and reinvest your investments, you will reap the compound interest ‘dividend’, which is essentially growth on growth.”
He compares investing in exchange-traded funds (ETFs) or unit trusts to buying a house. “When you buy a home, you look forward to seeing the value of the house increase. Although you are confident the value will increase, it won’t do so overnight. You know and expect the value to increase with time. You should have the same understanding when it comes to investing,” says Gabriel.
Even though numerous platforms and apps allow you to check your earnings from the palm of your hand, Gabriel urges investors to avoid checking investments daily. “Checking your investment earnings daily may lead to disappointment and instill fear, which may lead to selling investments too early. I recommend checking investments once a month or even every quarter, depending on the size and duration of the investment.”
Gabriel says savvy investors should empower themselves with credible information from credible sources to make more informed decisions. “Insightful advice is a game changer and the secret to financial success. Don’t ever pretend to know something you know you don’t.”
“The right advice is always available for your journey to investment success. A financial adviser knows what kind of risk you can handle and can put uncertainties in perspective,” he says.