I spent the last few years slowly diversifying my investment portfolios, always within a calculated tolerance. My mixed equities portfolio was progressing on the right trajectory, but I guess I wanted something more exciting or aggressive. Something I believed could double my portfolio returns within a much shorter period of time. I was dead wrong.
“There is no quick fix!” This was the sentence I heard from someone screaming from high above me.
How many times have we heard that you could
double, triple, guarantee or become an overnight millionaire in the public
media or platform? There might be a few exceptionally lucky ones out
there, but how many times have we heard someone who was burnt
badly instead of becoming overnight winners?
“If it was that easy, everyone would be a millionaire.” Said my investment mentors.
Despite following the marketed steps religiously, I failed to achieve the results that was projected. No one can accurately predict the markets nor has the magic crystal ball. It is totally a different kind of beast out there. Many predicted X but they always attached a disclaimer “past performance does not guarantee future returns, etc, etc….”
Luckily, my long-term strategic positioning managed to keep my portfolios away from too much reds, with my best performing classes carrying the losers. This was a good lesson and I continued to move forward with great caution.
Diversification is a great way to hedge your investment portfolios but do not let naive beliefs overtake your sound judgement. Hedge your risks against sudden markets movements and don’t introduce additional risks thinking that it will improve your returns during downturn. Be strategic, as we are in it for the longer-term.
Manage your investment portfolio like your own life. Treat it with great respect. You must know all your numbers, the ins and outs, and the net returns.
