The likes of Warren Buffett, Benjamin Graham and Peter Lynch are highly successful investors at their own right. They are living testaments that good investments can put their financial life in order and give them a good life.
For the average Joe who is new in the investment game, what can you learn from these individuals and other equally successful investors? Here are four investment advice on how you too can generate the highest possible annual returns on your long term investments.
Be patient when investing
Sharing a brilliant quote from top investor Warren Buffet, “No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”
When it comes to long term investments, do not expect to see immediate and fairly huge gains. Seasoned investors prefer to take a long term approach. They know when to step back and give their investments time to prove their worth. This is particularly applicable in the property investment sector as the longer one waits, the higher the returns may be.
Of course, the amount of capital growth in the property investment sector is hardly linear. Even when there are reports on the daily news and hearsays about the performance of the investments, rather than making quick investment decisions, seasoned investors have the sense to not let their emotions get the best of them. They take their time to ascertain the credibility of the news and seek sound advice before taking the next step.
Take measured and calculated risks
Benjamin Graham once said: “Successful investing is about managing risk, not avoiding it.”
One of the characteristics found among successful investors is they are risk-takers. These investors are not afraid of moving beyond their comfort zones when it comes to achieving their long term financial goals.
Wanting to become a successful investor means you will need to take measured and calculated risks which involves diversifying your investment portfolio to include long term investments as well. This in return will help you to create wealth in the long run.
To give you an idea whether the investment risk is worthing taking, be cautious of anything that sounds too good to be true. At the same time, identify your risk appetite and align your long term investment portfolio to it. Before investing, do your due diligence and research to ensure the investment product will help you meet your financial goals.
Have a concentrated investment portfolio
A lot of investors end up diversifying their portfolios without giving much thought into it. The thing about having a diversified portfolio is every investment product should play a role in helping you meet your long term financial goals.
Successful investors have been known to have concentrated investment portfolios. The portfolios allow investors to focus on quality and worthwhile investments. Not only do these portfolios provide wealth creation, they also serve as a means for wealth preservation.
However, going overboard and dabbling in too many investment products can also produce less than average results. In a nutshell, invest in a mix of investment products that can work best with your age and risk appetite.
Monitor your portfolio
Seasoned investors typically have their own investment managers or people to manage their long term investment portfolios.
From the very beginning, you may not have access to such people to help you. What you can do is you can keep a close watch on your long term investment portfolio on your own and if you have the means to do so, engage a qualified and trusted financial planner for advice. Monitor and review your portfolio every 12 months or so as this will help you to see the progress of your long term investments and make smart decisions on non-performing ones.
Successful investors may have access to the best long term investment managers money can buy, but they initially started their investment journey as a beginner. Like them, you too can have a successful investment portfolio and achieve your long term financial goals.
