By Naledi Makiwane - Investment Specialist, Coronation Fund Managers
When it comes to doing the best that you can with your money, the power is in your hands. No matter what your particular investment goals are, here are five things that you can do to give yourself the best chance of achieving investment success:
1. Prioritise your future
Our world revolves around spending money on experiences and things that bring instant gratification. However, one of the key ingredients for investment success is limiting how much you spend now so that you can rather save for more medium to long-term goals, such as furthering your own education or a comfortable retirement. Learn to pay yourself first by committing a portion of your salary to your future needs before taking care of other non-essential expenses, if and when possible.
2. Just start
Getting started on your investment journey towards a future goal may seem daunting until you actually do it. First, identify how much you are able to invest on a regular basis through working out your budget. You can start from as little as R500 a month and build up your investments from there.
3. Choose the right investment fund for you
To decide on the most appropriate investment fund to meet your future goals, consider how long you want to invest for and how much volatility you are willing to take. (The longer you have to invest, the more volatility you can take). Do your research, select the right fund for you and stay the course.
4. Diversify
Diversifying means investing across different asset classes and geographies so that you are not exposed to the potential volatility of just one asset class or market. If you choose a well-diversified balanced fund, your investment journey will be far less bumpy, making it more likely for you to remain invested.
5. Commit to investing for the long term
Thinking long term means staying with the investment fund you choose for as long as it is still relevant to your circumstances and not just when it is doing well. Chopping and changing your investment options interferes with the compounding of returns over the long term, which is the real benefit of staying invested.
Following these investment basics can set you on the right path to investment success. Should you feel overwhelmed and in need of advice, strongly consider talking to a licensed financial adviser. Just like people see a medical doctor for their physical health, consulting a trusted financial adviser is good for your financial health, especially when your financial situation is fairly complex. A good financial adviser will help you work out how much you need to save to meet your investment goals and a plan to achieve them.
To start investing, speak to your financial adviser or visit coronation.com.
Coronation is an authorised financial services provider.