I have been working in the investment industry for nearly 33 years. Over that time I have made a few mistakes and have had many successes. This week one of my clients, a very successful young Kampala man, told me that whilst he had made a lot of money in business he had lost a lot of money that he had invested. He asked me what advice I would give him to help him make better investments. Based on my experience here are ten “DO´s and DON´Ts” for successful investment:
- DON´T do it if you don´t fully understand it
If you don´t understand EXACTLY how an investment works then either you are being scammed or the person promoting the investment isn´t competent enough to trust with your money. If you are unsure about any aspect of the investment don´t do it!!!!
- DON´T ever invest money that you may need quickly
There is an element of risk in every investment. Even the investments that safeguard your capital may require a longer term than initially scheduled. If there is any chance that you may need the capital you are investing returned quickly then it is not money that you should invest.
- DON´T be afraid to take qualified risks
If you have money that you can afford to lose then invest it into slightly higher risk and much higher reward opportunities with advisors that you trust (and who have helped you find successful balanced investments in the past). You think that Mark Zuckerburg, Warren Buffet, Bill Gates and Jeff Bezos didn´t take some risk?! The risk/reward ratio is a scientific and economic fact
- DON´T listen to friends and family
Unless they are investment professionals! Otherwise they will tell you that what you have chosen to invest in is a scam……and that you should have invested in OneCoin where their best friend is making a zillion dollars an hour. Seriously, you wouldn´t go to non-medical friends and family for diagnosis so don´t go to them for financial analysis.
- DON´T do what you have always done
Because if you always do what you have always done you will get what you have always got. Which if you are Bill Gates is great;but for the rest of us it is not so good. Listen to new ideas. Invest in new instruments, areas and industries.
- DO speak to someone whohas done this before
Client confidentiality is paramount in financial services. But if your advisor cannot find a single client to tell you about the good things that he has done for them……he or she may not have a single success to talk about. Ask them to connect you to someone who has tasted the success that you are being promised. If they won´t then tell them to come back when they can.
- DO ask to see all the research that your advisor has done
Generally financial conmen have no substantive information. Investment Owl rejects 93% of the investment opportunities that we analyse. Ask your advisor to provide detailed due diligence on the investment that they are recommending. Use the word “audited” and you may never hear from them again!
- DO listen to experts
As long as you understand their agendas! Your bank will always tell you that they are the only safe place to invest. Not true. The bank´s primary concern is always the bank´s best interests. Not often their clients’. Find people who have worked in investment for many years and who don´t ask you to send them money the first time that you meet. Or even the second!
- DO diversify your portfolio
Land and property are not liquid assets and should not make up more than 50% of any individual´s wealth. A mix of 50% land/property, 30% passive capital-protected investments, 5% speculative investments, and 15% cash is right for most people.
- DO listen to your gut
The way you feel about an investment in the pit of your stomach……is always right for you. If your soul says “NO!” then the answer must be “NO!” It may sometimes cost you profits but it will never cost you capital.
At Investment Owl we want to build long term, mutually beneficial, productive business relationships. We don´t promise clients that they will “get rich quick”. But we can promise them that if they work with us they will stay rich and get richer…….if they follow these DO´s and DON´Ts! Wealth protection and wealth creation is what we have done for more than 30 years and we have learned the hard way!
Jon Pedley is Chief Operating Officer at Investment Owl