Page 5 - SA Chamber UK Newsletter April 2024

investors from reaching their goals, provided they maintained a long-term perspective
and appropriate diversification. Another key takeaway: time in the market is often
more valuable than trying to time the market, which can be almost impossible to get

right (even for professional investors).

Diversification across asset classes should never be underestimated. By spreading your

investments around, whether across assets, sectors, regions and more, you manage risk
and can avoid making emotional decisions based on short-term market ups and downs.

It’s also worth reflecting on the pitfall of ‘home bias’, which is the tendency to favour local

investments and markets (over international options). It can feel safe staying closer to
home with your assets, but it can also limit your growth potential, and might hurt your
returns in the long run.

Behavioural finance and better decision-making

By becoming aware of your own quirks, you can avoid letting emotions or fear cloud
your judgment – instead, keeping your long-term goals firmly in sight, and equipping

you with the tools to make more informed investment decisions.

Behavioural finance also goes beyond just the data. It gives you the skills to handle the
inevitable emotional rollercoaster of investing. Imagine the market takes a dip – panic
may set in, tempting you to sell everything. But by understanding your biases, you’re
less likely to make rash decisions (even in the face of adversity), which can ultimately

lead to better returns over the long run.

So, how do you put this into play? It’s important to have a clear investment plan and to
build a rock-solid portfolio. When investing, you’re never immune to risk but having strong
foundations can help you ride out the inevitable market bumps and stack the odds more

in your favour as you look to keep your money growing steadily over time.

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SA CHAMBER UK NEWSLETTER APRIL 2024