Joanne Kirk
Consultant
Invest like a business-owner
Here ’ s what an emotional investor does : Checks the market constantly , worries about every uptick and downtick , rapidly realigns his or her portfolio at the first sign of a stock or market downturn , tends to jump into and out of the market chasing hot stocks and dumping down stocks . An emotional investor severely limits his or her chances for long-term financial success .
Rational investors know that the best approach is to take the emotion out of investing . Many of them are business-owners and replace emotional investing with a business-owner approach . They have found success incorporating these business-owner principles into their investment plans .
Clear investment goals Rational investors set goals and have the discipline to stick to them . Yes , they want to make money but they set their return objectives against clear short- and long-term goals .
Know when to delegate Successful business-owners know they can ’ t do everything themselves so they hire capable people with the talent and ability to enhance their business . Similarly , rational investors delegate their investment decisions to professionals who have the talent and ability to help them achieve and sustain their financial goals .
Be risk averse Both rational business-owners and rational investors definitely want to create wealth but they also understand the need for wealth protection . That ’ s why their portfolios are carefully crafted and well-diversified to reduce risk and provide more stable returns over the long-term .
Just the facts Rational investors make investment decisions based on facts not on feelings . They do not get caught up in “ the investment flavour of the moment ” and are careful to keep their emotions out of investment choices .
In the know Rational business-owners keep a daily watch on investment news and consider its implications but like rational investors , they also keep their focus on long-term trends not day-to-day fluctuations .
Seize opportunity Rational individuals , business-owners and investors alike , trust their intelligence . They actively seek money-making opportunities – especially in a volatile market -- by hedging , shorting and using other investment strategies to pick up assets at bargain prices .
Miko Photography
If an unemotional business-owner approach to investing appeals to you – and it should because it ’ s often a better path to financial success – then talk to your professional advisor about the investment strategies that work best for you .
This column , written and published by Investors Group Financial Services Inc . ( in Québec – a Financial Services Firm ), and Investors Group Securities Inc . ( in Québec , a firm in Financial Planning ) presents general information only and is not a solicitation to buy or sell any investments . Contact your own advisor for specific advice about your circumstances . For more information on this topic please contact your Investors Group Consultant .
Consultant JOANNE KIRK , FCIP , EPC
Investors Group Financial Services 100 , 37 Richard Way SW , Calgary , AB T3E 7M8 joanne . kirk @ investorsgroup . com Office : 403.253.4840 ext 2511 Toll Free : 1.877.433.4840 ext 2511 www . joannekirk . com
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