Rules for successful investment

TAM | asset mangement Autor: TAM, asset mangement | 02.12.2020 | 3 minutes of reading

Rules for successful investment

The key to success is choosing the right fund, not to panic at times of decline and give your investment enough time

1. Get ready for the investment value swings

Getting ready for the fact that the investment value will have its swings is essential for a successful investment. The majority of investors experiences also negative periods during the investment. The important fact is that there are much more positive periods on financial markets and they last longer than negative ones. Negative periods are not appropriate for withdrawing the investments, it is rather recommended to use decreases on the market for further investments. Once the situation gets better, your assets will feel it too.

2. Importance of choosing the right fund

If I expect a high yield and invest in an extra conservative fund, I will not be unpleasantly surprised by decrease of my investment but on the other hand, I will not achieve high yields.

But if I am a very conservative client and invest in a dynamic fund  with a possibility of high yields, it is likely that I will not be able to emotionally withstand more significant swings of the value of my investment and I will end it at the most inappropriate time – at its decline. Consistency of your fund with your investment profile can be verified with your personal banker.

3. Everything needs its own time

Even the best investment strategy is worthless when the investor does not continue with the investment. Tests of the investment strategies of our funds show the extraordinary importance of keeping the minimum recommended investment horizon. For instance, in case of the Premium HarmonicTB strategy it was true for the last 50 years that if an investor invested in such strategy for 1 year, he/she recorded a result with positive performance in 83 % of cases. However, if the investor would have continued for 5 years (minimum fund investment horizon), the share of positive periods would increase to 99 %.

83 % pozitívnych období pri jednom roku

99 % pozitívnych období pri piatich rokoch

Note: Historical test of Premium HarmonicTB fund strategy since 1972

Surprisingly, a recipe for successful investment is not at all complicated. Investors who invest regularly and manage to maintain their investment discipline, those who keep a cool head in negative periods, do not panic and do not end their investment too early get the best results.

The best tip for how to invest successfully is to invest regularly each month in a mutual fund, which corresponds to the investor's goals and expectations, and to use any potential decreases for extraordinary investments.

Tips and tricks for successful investment

  1. Make regular and long-term investments
  2. Invest at the time of decrease at better prices
  3. Keep the recommended minimum period of fund investment
  4. Use also growth and dynamic strategies
  5. Set everything in your Investment calculator.

 

Notification
The yields from a mutual fund investment until this day provide no guarantee of future yields. Data on the mutual fund assets value development and yields on management of the mutual fund assets do not forecast the development of these indicators in the future. The investment in a mutual fund is connected with risk and the yield until this day provides no guarantee of future yields.  The by-laws, selling prospectus and key information for the mutual fund investors are available in Slovak language version at Tatra banka, a.s. branches. As much as 100 % of the value of assets in a mutual fund can be invested in the transferrable securities and financial market instruments issued or guaranteed by a member state of the European Union. The official name of the mutual fund: Tatra Asset Management, správ. spol., a. s., Premium Harmonic o.p.f.

Súvisiace články

Posúvame svet investovania už vyše 20 rokov.

Blogs
Einstein's advice on how to earn money with the eighth wonder of the world

Einstein's advice on how to earn money with the eighth wonder of the world

How can Einstein´s genius help your money?

www.tatrabanka.sk | Dialog: *1100 | Tatra banka a.s.
https://www.tatrabanka.sk/en/tam/blog-news/blogs/rules-successful-investment/