Invest
Investor habits: The good, the bad and the ugly
An investment expert has weighed in on some of the best and worst habits held by investors, and how they can help or hinder an individual’s journey to wealth.
Investor habits: The good, the bad and the ugly
An investment expert has weighed in on some of the best and worst habits held by investors, and how they can help or hinder an individual’s journey to wealth.
In conversation with nestegg, eToro’s Australian managing director, Robert Francis, began by highlighting the importance of research, preparation and planning when investing in shares.
“Investors should read the daily news and keep up to date with market and industry trends,” he advised.
And when it comes to portfolio maintenance, “it is also a good idea to regularly rebalance portfolios to ensure it remains industry-diverse and geared towards high performance”.
“Rebalancing your portfolio allows you to maintain ideal asset allocation and diversity over time, which helps to hedge risks associated with investing.”
So, portfolio decisions and investment choices aside, what are some of the ways of thinking that investors can adopt to ensure long-term success?
- Adopting a long-term mindset
“Frequently chopping and changing investments means they won’t have a chance to achieve their potential and cuts profits prematurely,” Mr Francis said.
He also flagged how investors can incur extra fees for high trade volumes, depending on the investment platform they use.
- Diversifying your portfolio
“Don’t put all your eggs in one basket.”
According to the managing director, investing $1,000 across 10 different companies is much safer than investing $1,000 in one company.
- Being realistic
“Always set practical stop losses and take limits that are aligned with your own risk appetite,” Mr Francis advised.
He highlighted that global markets do operate overnight for Australians, so you may not be awake for major market movements.
- Understanding the risks
“Regardless of market conditions, investing in the stock market can be risky,” the managing director noted, emphasising the importance of investors understanding this.
Mr Francis also revealed a number of actions that can derail portfolio success.
Here are three habits he has advised steering well clear of:
- Setting unrealistic goals
“Investors should avoid setting goals that are vague, too broad or exaggerated with no timeline,” the managing director noted.
In a similar vein, don’t set your standards too high.
Instead, Mr Francis recommends evaluating both your present condition and intended financial position when goal-setting.
- Being impatient or acting emotionally
According to the director, “Impatience or impulsiveness can lead investors to make quick, irrational and costly decisions.”
“Investors should remember to keep their cool and create milestones along the way to encourage them to pursue their ultimate goals further.”
“Financial success takes time, and level-headedness,” he reminded.
- Failing to plan
Lacking a financial plan means having no focus and being easily swayed.
“If investors do not have a plan for how to manage their money, they will be vulnerable to impulse buying, overspending and making other unwise decisions,” Mr Francis explained.
Even where an investor appears to be earning a lot, “failure to plan will ruin their set objectives”.
About the author
About the author
Stock market
Could this bull market be losing steam?
There’s an old investment adage that bull markets never die of old age, with the current market showing signs of cracking just months after the recovery, an industry expert warns. ...Read more
Stock market
Super fund investors bid to acquire Sydney Airport
A group of super fund investors has lodged a non-binding takeover bid for Sydney Airport, valuing the company at over $22 billion. ...Read more
Stock market
10 most globally held stocks revealed
Australian investors remain bullish on electric vehicles and technology stocks, according to their long-term held positions, new research has shown. ...Read more
Stock market
How ‘gamer investors’ are pushing a new wave of social responsibility
A new generation of younger retail investors are pushing a new social movement, yielding a distributive impact on the markets, most notably through the GameStop saga, two researchers have revealed. ...Read more
Stock market
ASX tipped for record high despite inflation fears
The market is tipped to shake off fears of rising inflation, with the ASX 200 now tipped to close the year at a new record high, an economist has revealed. ...Read more
Stock market
‘Commission-free propaganda’: Warning issued for retail investors
The phrase “if you’re not paying for it, you’re the product” applies just as much to stock trading apps as it does to social media networks. ...Read more
Stock market
Is the tech sell-off creating opportunities for investors?
A tech sell-off sparked by inflation concerns has seen world markets crash. But is it creating an opportunity for investors to ‘buy the dip’? ...Read more
Stock market
Government opens arms to Wall Street
In its bid to maintain Australia’s global competitiveness, albeit its firmly shut borders, the Australian government has included a measure in its recent budget to allow foreign financial services p...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Stock market
Could this bull market be losing steam?
There’s an old investment adage that bull markets never die of old age, with the current market showing signs of cracking just months after the recovery, an industry expert warns. ...Read more
Stock market
Super fund investors bid to acquire Sydney Airport
A group of super fund investors has lodged a non-binding takeover bid for Sydney Airport, valuing the company at over $22 billion. ...Read more
Stock market
10 most globally held stocks revealed
Australian investors remain bullish on electric vehicles and technology stocks, according to their long-term held positions, new research has shown. ...Read more
Stock market
How ‘gamer investors’ are pushing a new wave of social responsibility
A new generation of younger retail investors are pushing a new social movement, yielding a distributive impact on the markets, most notably through the GameStop saga, two researchers have revealed. ...Read more
Stock market
ASX tipped for record high despite inflation fears
The market is tipped to shake off fears of rising inflation, with the ASX 200 now tipped to close the year at a new record high, an economist has revealed. ...Read more
Stock market
‘Commission-free propaganda’: Warning issued for retail investors
The phrase “if you’re not paying for it, you’re the product” applies just as much to stock trading apps as it does to social media networks. ...Read more
Stock market
Is the tech sell-off creating opportunities for investors?
A tech sell-off sparked by inflation concerns has seen world markets crash. But is it creating an opportunity for investors to ‘buy the dip’? ...Read more
Stock market
Government opens arms to Wall Street
In its bid to maintain Australia’s global competitiveness, albeit its firmly shut borders, the Australian government has included a measure in its recent budget to allow foreign financial services p...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
