Ray White (in for Bruce Whitfield on The Money Show) interviewed Warren Ingram, a financial adviser at Galileo Capital.
Ingram discussed six common sense investment tips for this year, and beyond.
This too shall pass!
Whatever happened in markets last year has no bearing on what will happen this year.
Markets may rebound or continue falling.
Don’t let the recent losses influence your expectations for 2019.
Recent stock market performance is not a good predictor.
Equities and listed property are still your best choice for growth.
The JSE lost 8.5% in 2018 while listed property lost 25%.
This doesn’t mean you should avoid them!
Over 10 years (including 2018) they generated more than 12% per year for investors.
Valuations are important.
Valuations are the most critical factor in determining what your future returns are going to be.
At the current price-to-earnings ratio, you should expect normal long-term returns from the JSE (i.e. 12% per year).
Something big and unexpected will happen.
Every year investors are surprised by a significant and unexpected event.
When they are very negative, the surprise is often very positive.
Don’t get sucked into the current state of pessimism about South Africa.
Use rational triggers to make decisions; not emotional ones.
Someone is going to brag about their performance in 2018.
There will be some smart Alec fund managers who are going to brag about their performance in 2018.
If they are brazen, they will hold press conferences and do the rounds on financial shows about how great their fund is.
One year is not enough time to determine whether a fund manager was skilful or just lucky.
Get your game plan right.
Decide how much you need in growth assets based on your position and objectives; not on the recent performance of markets.
Decide how much you need to invest offshore.
Phase your money into investments when things are volatile.
Don’t sell your shares now.
For more detail; listen to the interview in the audio below.
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