 Developing
a Successful and Sound Investment StrategyCreating a sound investment strategy is an important and often overwhelming task. Markets change and flux and business is unpredictable by its nature. Combine that with the financial industry's countless gurus and the equally endless philosophies they offer and it is any wonder why you have to be a financial analyst to make heads or tails. To aid the formation of sound strategies, we have compiled a list of “concepts to consider” for the novice investor. Our hope is to raise good questions and offer our perspective in our typical coaching style. Understanding how the markets work is vital to forming the investment strategy you will be most comfortable with. In fact, there are 15 markets worldwide! Understanding each and investing properly is crucial to managing risk and return. Once you understand the basics of how markets work, you will need to define your investment philosophy. The truth is, there are really only a few philosophies and discovering which you agree with is fairly easy once you know what you are comparing! Now that the background work is done, we can look at concepts such as your “portfolio”. Most people have heard this term as it relates to investing, but few have a clear understanding of how to manage it. What is included in a portfolio and having a system to measure volatility are keys to successful investing. Speaking of your portfolio, things are not always as clear as they
seem. Measuring the total amount of commissions and costs in your portfolio
depends on the account manager's fee structure, trading costs and other
expenses, not to mention some hidden goodies! Knowing your costs can
sometimes be more difficult than you expect. |
