The Four Golden Rules of Investment Management

An easy 4-stage investment management model explained

Saving is the entry to investing.

You invest through saving. You’ll have an investment goal and break it down into small savings per month or week. With time, you hit the target.

1. Time Horizon

You have to link your investments to the time horizon that applies to you.

2. Risk Appetite

This is linked to your time horizon.

The paradox of risk:a) Don’t put all your eggs in one basket. If you lose the basket, you lose it all.b) Don’t put your eggs in too many baskets. The more you manage, the less energy you can put into each one. It’s risky to do things halfway.Diversified, but focused. — James Clear

3. Decide Where and How to Invest

Think about the following:

4. Review your portfolio

  • Do this regularly.
  • Review against changes in financial markets.
  • What’s happening to interest rates?
  • Which new laws have been introduced in the sector?
  • Where have the share prices moved to?
  • Are there opportunities you should be taking or should you be cashing in investments that now seem to be performing badly going forward?

Since the days of Babylon people have been coming up with investments, mostly to sell to other people. There’s a strong financial incentive to make these investments complex and mysterious.But the simple truth is this: the more complex an investment is, the less likely it is to be profitable. — JL Collins

The above 4 stages are a cycle that overlaps. In all the stages you can onboard and offload investments opportunities.



Your voice of reason before you blow all your money this weekend!

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