Even if you believe you already know how to drive your investments, just knowing is not enough. If you don’t have the right map you are guaranteed to make a few wrong turns along the way and this will cost you time and money. So how do you get on the road to success?
By Janine Cox
Firstly, if you have ever travelled along an ocean road you might recall having to keep your eyes largely glued to the road so as to keep the car from veering off the edge. As you drive along you can’t see what may be around the next corner so you grip that steering wheel tighter. You finally reach a straight stretch and off in the distance you can see your destination. Suddenly the traffic comes to a stop. You discover that the road has changed and there is a detour in place that you were not prepared for. What this means is the time to get where you want to go has now doubled.
Investing can be a bit like this if you don’t start your journey with the right information.
What a lot of investors don’t see is that making money successfully is not just about deciding on a destination, or just buying a few assets and hoping they rise in value. As the investor you have to find the right information before you start so that you know you are more likely to get the outcome you want. So how do you do this?
By completing your own thorough research as well as asking people who you believe are credible and willing to pass on their knowledge and experience.
The challenge for you is to recognise what information is useful. Remember not everyone you speak to will have the right information and some will be beating their own drum rather than really sharing good insights. If you take a bit of time and put in the effort upfront you are much less likely to end up following that procession taking the detour – just one phone call to the road authority would have provided you with the right information to prepare for the drive.
The best piece of advice I can give you right now is this:
- Look for a great coach in each of the areas you want to invest in. Be prepared to talk to friends, family, work colleagues, and get references to the experts they have used. I’m not saying to take the advice of friends or family necessarily, you always need to do your own research. However, those experts who come highly recommended are likely to give you a better head start.
- Document or record your research and weigh up the pros and cons, then arrange to talk to the experts. Some won’t charge for a first consultation, some will. Be prepared to pay something and have questions ready. They may share their own personal experiences which will may reveal a lot. Ask about the risks, and what you need to be aware of.
- Never assume something is too risky until you understand the risks and what can be implemented to mitigate them.
- Above all, make sure you understand not just the investment itself before you buy but also the market this investment is in. The clearer your road map is the more likely you are to arrive at your destination as planned.
Investing will provide you with so many exciting opportunities, however, even if your preparation is thorough you can’t always plan for absolutely everything that may occur. Remember, your best defence is your best offence so build up your knowledge and have a list of reliable experts on hand that can provide assistance if you need it.
Janine Cox Senior Analyst at Wealth Within is a highly regarded analyst, share trading educator, mentor, regular market commentator for the ASX, Sky Business and other national media.
