HSBC: Investment Tips And Advice To Live By
[Advice column by HSBC Bermuda]
I can’t afford to see a financial advisor so I have been making investing decisions on my own for about 6 years. Do you have any tips that can help me make better decisions?
It is great that you have taken the initiative to develop an investment strategy on your own. However, not all financial advisors charge a fee. At HSBC we will work with you to develop an investment strategy* that meets your financial ambitions, at no cost to you.
Whether you decide to see a financial advisor or continue to make your own independent decisions here are some things to consider.
Common investment mistakes to avoid:
- Trying to time the market
Investors often think they can pick the turning points in markets, but correctly picking the highs and lows in markets is difficult. Instead of boosting your returns, you are likely to miss the best days of performance. This approach can be very costly. - Letting emotions hinder your decisions
Don’t be driven by your fears. Many investors react to market conditions and at the slightest threat or sign of danger, their natural instinct is to abandon their strategy. You need to consider the long term return of your investment. - Lack of discipline
Investing with emotion and lack of discipline are closely related. Investors tend to gain confidence as markets rise and become insecure as markets decline.
Investment advice to live by:
- Take a long-term approach to investing and stick to your plan
- Build a diversified portfolio that suits your risk appetite, investment objective and time horizon
- Review your portfolio on a regular basis
- Don’t try to time the market
- Don’t relate historical performance to future performance
- It is hard to predict returns. Simply following last year’s winners or putting all of your “eggs in one basket” may not work.
- Avoid the typical traps of selling at lows when sentiment is gloomy and buying at peaks when outlook is strong
- Diversification helps because 1) predicting which asset class will out-perform going forward is difficult 2) risk can be reduced if holdings are properly diversified.
- Successful investors typically deal with market fluctuations by using a disciplined approach and focusing on their long-term objectives.
Free Financial Planning with HSBC
To get started on your investment strategy, simply make a free Financial Planning appointment on www.hsbc.bm/planning or by calling 299-5959.
Our approach takes you through the complete financial planning process, at no cost to you. We’ll work with you to understand your particular circumstances and financial ambitions and then recommend solutions to suit your needs. You’ll also have access to first-hand market insights on what’s happening around the world and the assistance of a dedicated HSBC Premier Relationship Manager or Wealth Specialist who’s connected to HSBC’s worldwide network of on-the-ground experts.
Investors should be aware that performance returns are affected by market fluctuations. Investing entails risks, including possible loss of principal. Issued by HSBC Bank Bermuda Limited which is licensed to conduct Banking and Investment Business by the Bermuda Monetary Authority
