Having a set of principles by which to guide your investment strategy is a key part of growth and development as an investor. There are numerous investment principles that can be followed, however, the one that will be most applicable will depend on a range of factors, such as your access to capital, level of risk tolerance, and any long-term financial goals you have.

Be aware of the risk: When it comes to investing, generally speaking, the greater the level of risk involved in investment, the greater the potential for reward.  Finding the right balance of risk and reward will vary from one investor to another, as one individual’s tolerance of risk can be very different from other investors. The key is to be fully aware of the level of risk involved in any investment you are about to make, and whether or not that amount of risk is tolerable for your own personal goals.

Set realistic goals: Every investor wishes to see gains from their investments, but sometimes without a clear goal in mind these gains can appear nebulous, typically investors will use figures such as ROI to measure their performance but without a clear goal as the foundation these figures will mean little.

When setting goals it is important to ensure they follow SMART practices, meaning that your goals should be, Specific – Measurable – Achievable – Realistic – Timely. Often an investor will set themselves up for failure by setting themselves an unrealistic goal, such as “I want to make the most money I ever have from investing” and then will be disappointed to find that their goal has not been achieved. SMART goals allow investors to gear themselves toward success by setting realistic and achievable expectations from their investment portfolio.

Understand your financial limitations: Investing more than you can afford is not wise. To truly make the most out of investing, the amount of capital you have at risk should never be enough to keep you awake at night. Instead, it is advisable to invest an amount you can easily afford each month or quarterly, to ensure that you do not put your livelihood on the line for potential financial gain.

There is never a “perfect time” to start investing: Due to the way that inflation works, and the low rates of interest found when keeping money in the bank, it is never too late to begin investing capital. An investor doesn’t need to accumulate a vast sum of money before they start investing. As long as the level of risk is tolerable for them, the wide range of investment opportunities available in the modern day means there are typically better uses for your money than simply holding onto it until “the time is right”.

IMPORTANT NOTICE

Investors should recognize and accept the risks associated with investing.

Certain investments may require you to keep your holding for periods of many years with limited or no ability to resell unless there is a strongly regulated secondary market.

You may also have limited access to periodic reporting, see your holdings decrease and increase in value, or even lose your entire investment.

Investors should decide for themselves whether to make any investment, basing this on their own independent evaluation after consulting with financial, tax and investment advisors.

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