Investing is not about avoiding risk. It is about understanding the risks and pricing the risk accordingly, which is why we refer to risk and return. The return must be commensurate with the risk taken. The trick is understanding risk.
Five key tips for DIY investing
If you planning to be the next Allan Gray, then this article should be of interest to you with five tips for successful DIY investing. Tip 1: Read articles on behavioural finance and study the various biases, which wreak havoc
Emotional investors need good advice
Allan Gray asset management recently came under fire in an article, in which the author opined their recent poor relative performance. The author, who will remain nameless as I think he may have been looking for publicity, blamed the disappointing
Last March’s panic selling is a loss one will never recover
The price of generating real above inflation returns by investing in the share market is accepting the inherent volatility associated with equity investing. Investors must remember that short-term price volatility is not the risk per se. The risk is how you
Proper Investor’s input is best
Harry Markowitz developed Modern Portfolio Theory, which theorized that investors could design a portfolio to maximize returns by accepting a quantifiable amount of risk. In other words, investors could reduce risk by diversifying their assets and asset allocation of their investments using
Covid-19 causes K-shaped crisis
The recent COVID-19 crisis should be a reminder that sh…t happens and the importance of stress testing your personal finances. The shape of the recovery is best described by the letter K with the upward sloping arm of the K
Do nothing is the hardest rule of all to get right
Guru investor Terry Smith, founder of the phenomenally successful Fundsmith in the UK, has a remarkably simple investment philosophy based on three investment rules: Invest in a good business Pay a fair price for the business Do nothing! I will
The meaning of capitulation
The investment industry uses some very descriptive words in describing investor behaviour and one of these is capitulation, this is the point when investors throw in the towel. Throwing in the towel is boxing speak for give-up. Picture the towel
Investor behaviour risky
“Smart money” is used to describe institutional or professional investors, by default that makes the rest of us the “not so smart money”. What seems to distinguish the “smart” from the “not so smart” is the degree of emotional influence
Investors, beware of ‘Tina’
The tile of this week’s article sounds more like a tropical storm warning than a warning to investors, which may be appropriate given that TINA can be just as devastating on your wealth as a category five hurricane when making