Successful investors that are active overseas seldom rely on their “instincts” – in fact, we at Zavos Property Management agency, know of no investor that has been consistently successful in every given field or sector and used his gut to make decisions. The key to reaching your goals in this game is consistency.
What we mean is that investing successfully abroad on a relatively steady basis requires a consistent business behaviour, sound fundamentals and firm resolution to achieve long-term goals.
However, let’s make things simpler, by breaking down this generalised terms. Read on and find five habits all successful overseas investors adopt.
- Draw a Long-term Investing Plan—and Avoid Deviations
There are stories about hot-shot investors made a fortune with an amazing, groundbreaking idea – but most of them fall into the category of urban legends, or even fairy tales. Proper investing has nothing to do with luck or innovation. Such things are rare and seldom do they repeat themselves in one man’s time life.
Proper investing has to do with long-term goals, which can only be reached through proper planning, and consistent efforts to realise it. This means that frequent deviations, bursts of enthusiasm and constant orientation changes will only get you in trouble.
- Treasure Saving
Most investors that to accomplish anything substantial fix their attention on how much their investments return. On the contrary, successful investors focus on their savings. Why?
Because your savings are the pool feeding your investment plan-the one you must stick to, remember? Don’t forget that you cannot control the market, but you can control your bank account. So, treasure saving. Make a habit of it; it is the power engine that will get you to your goals.
- Do not Let Volatility Scare You Off
When you see the market taking a bath, reasonably all your neurons in your brain scream to you “Walk away now!” Yet, this would be a gross mistake.
Investing successfully abroad requires a deep understanding of the time needed to reach your goals, having the financial capacity to sustain some losses over this period, as well as mental strength to endure the market’s volatility and not let it scare you off and deviate from your plan.
If you are forced in any way to allocate cash during a crisis, opt for a less volatile asset combination – one you will hold on to whatever the weather.
- Diversify your Portfolio
The only way an investor can boost potential returns is to accept more risk. While that is true, there is a way to alleviate it – and it is called diversification.
By diversifying your investment portfolio, you will probably get less when the market goes up, but you will also earn much, much more in the long run, since blows will be much gentler and gains much steadier.
The best course, and most popular among investors active abroad, is to diversify among stocks, bonds, and cash, as well as within these categories and among investment types.
- Go After Low-Fee Investment Options with Good Value
Last, successful investors understand the simple, most fundamental truth about any market: it is beyond anyone’s control, no matter how skilled, clever or experienced he or she may be.
Hence, the strive to control what’s undoubtedly in their grasp: expenses. Expense ratios are, in fact, the most reliable predictor of future fund performance regarding both overall return and future risk-adjusted return ratings. Simply put, the cost of trading has a significant bearing on your returns.
So, opt for low fee investment options that do offer good value. They usually are the best hits out there.
Investing is an art, and all arts have rules except for talent. Learn them well, and you will get there, sooner or later.