First Habit: They are realistic and have reasonable expectations. They know they can’t pick the winner at the start of every year so they diversify their portfolio across quality growth assets and take a long-term view.
They understand long-term investing is measured in years not months.
Second Habit: They have two disciplined annual behaviour patterns.
· They aim to save at least 15% of annual income on a regular basis and add consistency to their investment portfolio.
· They rebalance their portfolio on a systemic basis each year to minimise risks of becoming overweight in a specific investment or asset class.
Third Habit: They diversify correctly. Building a diversified portfolio is like making a salad – by blending a variety of different ingredients together the result is greater than the sum of the parts. If you choose a “spicier” salad then you can expect a more volatile ride.
Fourth Habit: They lead balanced lives. In short, they have a balanced perspective on life that acknowledges challenges and struggles, but with an overriding spirit of optimism and courage.
Successful investors recognise that wealth is not the end goal, but a means to establish one’s life goals.