Improving Your Investment Approach

1. The First Step – Writing: This advice comes from experts in the field of investment and finance. What these financial experts intend to communicate is that anybody who enters the realm of investment must have a solid strategy. And the one way that you’ll know what your strategy is, if you have not been deliberately following one, is when you write down the steps you have taken in investing over the course of time. Your pattern/ process/ strategy will then become clear to you, and you will then be able to identify problems in it and improve.

2. Strengths and Weaknesses: Once your strategy becomes clearer, the next thing for you to do is to identify the strengths and weaknesses in it. The point is to identify these in the context of an ever fluctuating market.

3. Better your Risk Management Process: One can improve their risk management techniques by looking at the current risks, potential risks and often neglected risks. Addressing these areas pertaining to risk can often help improve one’s investment strategy to guard against potential crises situations. Let us not forget the big example of the recession and the extreme losses suffered by investors, and the surfacing of lack of risk management as a major problem among individual investors.

4. Outcome Benchmark: Investment can be directed towards a long-term or even a short-term goal. However, these need to be managed appropriately and selected carefully. In any case, especially with long-term goals, the outcome is not usually the area of focus for the investor, since it is never quite possible to predict or speculate on the possible future of a company. Nevertheless, with long-term investments, it is important to pay careful attention to market trends and the response of the company that has invested into these trends, since that can indicate the stability of the organisation. This will, therefore, indicate to investors where their investments in that company are headed.

In addition to these pointers, it is also very important to manage one’s own knowledge, and to keep up with the everyday trends of the market and investments. This is one of the key principles of managing one’s investments safely and wisely.