Key Considerations When Investing

As you put away the Christmas Tree for the next 12 months and slowly get back to your work life grind, it is common to make a mental note of things you need to be better at for the new year. For a lot of us, being more disciplined in our finances is up there in priority (with fitness and dieting the other usual suspects!). However, often it ends up in the too hard basket as there are so many things to think about.

The key to any plan is to have an end goal and wanting it badly enough to commit both time and part of your cashflow to be successful. Here are a few key considerations you need when starting your own investment plan.

Start at the end: Have a Goal

The journey of a thousand miles begins with one small step. It also begins with having an end in mind. The clearer the goal looks to you, the more realistic and committed you will become. Hence having a goal is a key ingredient in having an investment plan.

Help me help you: Understanding your attitude towards investment risk

There is risk in doing anything, let alone investing. As 2022 has proven, markets can be very volatile and in the absence of perspective, investing can be a very bumpy ride for you. You need to understand your own attitude towards risk and comfort levels. Would you lose sleep at night if a market suffers a downturn, or you are comfortable investing for the long term, and understand that different assets perform differently?

How long is a piece of string? Your investment horizon

Time heals all wounds. This is also true for investing. The longer your time in the market, the more opportunity you have to make up for any volatility along the way. However, you may only want to invest for a short period of time. In that case, consider assets that have less risk built into it, such as a Term Deposit or Investment Bond.

Performance returns by Risk Profile

The eggs and basket thing: Diversification

This concept has been doing the rounds for a while now. The idea of not putting your eggs in one basket. It is a proven fact that diversifying your investments will reduce the overall risk level of your portfolio. Note that it won’t remove risk altogether. however, by spreading your investments over different types of assets (cash, bonds, equities, property, alternatives, etc.) it will result in a smoother ride, if that’s what you’re after.

Potential Return vs Expected Risk

Where and when do I start: Don’t try to time the market

Unfortunately, no one can always accurately predict what markets are going to do in the future, and this means trying to time when to commence or exit your investment is difficult for even the most experienced traders and professionals. But given the difficulty of timing when the market may rise or fall, the better bet is to simply stay invested. Focus on time in the market, not trying to time the market.

Phone a friend: Talk to a Financial Advisor

Not feeling well? Go to a doctor. Your car’s brakes making noises? Call your mechanic. Your wisdom tooth keeping you up? Visit your dentist (I think the point has been well and truly made). A financial advisor is best placed to help you navigate the intricacies of investing and come up with a plan to help reach your financial goals.

It is important for you however to understand the nature of the engagement with the Advisor, what the process looks like and their qualifications as well as their license to practice in the different jurisdictions. You also must be comfortable with any fees (both ongoing and upfront) that may be charged.

From the outside looking in, Investing may seem like a complicated issue; the noise we get from the media and the recent headlines doesn’t make it any easier. However, by attending to the points above you can cut through a lot of the clutter and start your wealth creation journey in the right manner.

CONTACT US >>


This presentation material and all the information contained herein is the property of Oreana Financial Services Limited (OFS), and is protected from unauthorised copying and dissemination by copyright laws with all rights reserved. This presentation material, original or copy, is reserved for use by authorised personnel within OFS only and is strictly prohibited from public use and/or circulation. OFS disclaims any responsibility from any consequences arising from the unauthorised use and/or circulation of this presentation material by any party. This presentation material is intended to provide general information on the background and services OFS. No information within this presentation material constitutes a solicitation or an offer to purchase or sell any securities or investment advice of any kind. The analytical information within this presentation material is obtained from sources believed to be reliable. With respect to the information concerning investment referenced in this presentation material, certain assumptions may have been made by the sources quoted in compiling such information and changes in such assumptions may have a material impact on the information presented in this presentation material. In providing this presentation material, OFS makes no (i) express warranties concerning this presentation material; (ii) implied warranties concerning this presentation material (including, without limitation, warranties of merchantability, accuracy, or fitness for a particular purpose); (iii) express or implied warranty concerning the completeness or relevancy of this presentation material and the information contained herein. Past performance of the investment referenced in this presentation material is not necessarily indicative of future performance. Investment involves risks. Investors should refer to the Risk Disclosure Statements & Terms and Conditions of the relevant document for further details. This material has not been reviewed by the Securities and Futures Commission of Hong Kong.

Insights

Read our latest insights to help you make better investment decisions and build stronger portfolios.

A Licensed Financial Firm