3 Investment Temptations

‘Did you get in on the Niu rally’ my friend said.

‘The what?’ I said…

He was meaning, did I invest in the Chinese car electric manufacturer that has had a great run on the markets, the Chinese equivalent of Tesla, it’s called Niu?

No I didn’t. I wish I did, because it has had a great run, although cooled recently. It is also tipped to be a stellar market pick for this year as the world pushes towards greener energy and the new US administration looks to champion that cause.

I might still do, it’s hard not to resist.

But if I do it will go against my planning around my long term portfolio. I do sound like a nob-end when I say this. (And when I write it)

But that is my first point of temptation. Don’t avoid the fact that you have an investment portfolio. Even if you have a company pension, you have an investment portfolio. You are probably not aware that you can choose how your pension is invested as you most likely will be able to do that. Look into that immediately, but do not hide that you are invested in something. Your savings account is an investment, a bad one if it is holding a lot of cash, but still an investment.

On the back of the idea of getting quick successes on riding an individual stock picks rally sits my second temptation. Don’t chase them. You will ultimately loose out.

Plan, base your investments with a mix that leans towards indexed linked funds which are cheap to administer, some cash, some bonds and maybe a small percentage of individual picks that you are in for the long term.

Niu, might look good for a long term pick and if it does to you, do your own homework on this, then wait until you do your quarterly portfolio review and make a change then.

Chasing the newest and latest even on the stock market is a route of folly. Be measured.

My friend also told me about his daily routine of checking the financials and seeing how things have transpired overnight. We live on separate continents.

I agreed that it is good to keep abreast of the financial news and I said I like to watch the markets in the US open up. It’s good to get a feel for what direction things are moving and also, it is pretty exciting seeing the buzz and the energy on that opening bell moment.

Making any judgment on that though, in the moment, is not for me. And here lays my third temptation. Never be tempted to tweak and change your investments frequently, like on a weekly or daily basis.

You will loose money and it will also cost you money chopping and changing. Don’t react to the fluctuations on the markets. It’s cool to enjoy the energy and the buzz, but see it for what it is; it is show buisness.

They say investment is very much a large part, physiological, and you have to be prepared to rise out the storms and surf the waves and all that jazz. You have to manage your adversity to risk, and avoid the temptations of crashing out on the cusps and troughs at the wrong time.

Markets, like life, are unpredictable and quite often that’s a great thing when it comes to life and a whole other story when it comes to your hard earned cash.

“If life were predictable it would cease to be life, and be without flavour”

Eleanor Roosevelt

My other temptation, if I am allowed one more, is to avoid the temptation of giving personal financial investment advice…

So, see what I have written above as nothing more than my personal advice captured only for myself. My own reflections, captured on the current technological medium… and you just happen to walk on by at the time of its publication and decided to drop in.

Thanks for stopping by.

Your company is most appreciated.

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