Don't do too much

I have often met folks who seem to believe that the investment process is and has to necessarily be complex and heavily managed.  They get a sense of unease if they are not taking some sort of action.  They feel they are not doing enough if they are not constantly re-allocating the portfolio or if they are not constantly buying or selling based on the news of the day. 

Investing doesn't need to be a process of constant and continuous action. In fact the best results are achieved when one doesn't do too much. The planning process itself needs to be thought through well based on your circumstances; your age, risk profile, ongoing financial obligations etc. But once you have signed off the plan try not to 'act' too frequently with your investment process. The less you do the better will be your result.  We often get swayed by the constant and unnecessary barrage of new information and noise. Social media has made this event more complex with so many financial advisers dishing out all sorts of advice.  Shut yourself out from this unnecessary noise. 

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Once you have set in motion your asset allocation and signed off a plan, stick to it come what may. This is of course based on the fact that that you have spent adequate time and effort in putting the plan together. If you don't the conviction in your plan, you will always have self doubt and be constantly steered into various directions.

                                

Think of the investment process like a buffet.  Before you begin, scan the buffet table. Understand what is on offer.  Understand what is good for you and importantly what is bad for you. There is a limit to how much you can eat. You also don't want to rush back to the buffet too often. Quite often the buffet table is laden with a huge arrays of foods, most of which are bad for you anyway. Your financial process should be similar to how you pick food at the buffet. Find out whats healthy and avoid food that may be bad for you.  Decide how much you want to serve yourself. And once you have served your food, relax and enjoy the experience.  Don't rush back to the buffet table too often. This will only make you take some poor decisions including some terrible food on your plate.

Read about the most important habit for financial security here

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