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“An investment in knowledge always pays the best interest.”- Benjamin Franklin
Many people from all walks of life have some time or other been interested in investing part of their savings for the creation of wealth. There are many types of investments, some riskier more than others. Some investors opt to delegate their investment decision making to third parties whilst others prefer to go solo and take more a proactive approach in their day-today investments.
As with many aspects in life, taking informed decisions are always better than taking decisions in a blindfolded manner, and this statement cannot be truer when dealing with investments. Whilst it is true that even the most experienced investors are known to have made bad calls, being aware of the risk/reward of an investment a priori will enable the investor to understand the level of risk s/he is taking and whether or not it is in line with his/her investment objective.
I cannot but stress the importance of reading and keeping abreast with market developments. This will not only enable investors to follow the current trends in market news, economic data and performance of asset classes but will also serve as a tool for the investor to train him/herself for anticipating market events and being on the lookout for key market data, news and the implications this could have on the investor’s portfolio.
The information can come from many sources such as online news portals (such as Retuers/Bloomberg/CNBC), newspapers (such as the Financial Times) and journals (such as the Wall Street Journal and the Economist), but I would also go one step further and encourage investors to invest in educational textbooks and investment-related books such Michael Lewis’ Liar’s Poker or The Big Short which are amongst my favourites.
Investors ought to take a keen interest in their investments and educating oneself is likely to ensure that their investments and investment decisions always fit in with their investment goals. A literal translation of a Maltese proverb is “An alerted man is half armoured”, which stresses the importance that whilst acknowledging the fact that decisions might not always necessarily be successful ones, being well informed ensures that there are no nasty surprises if things had to turn sour.
If you are stuck and there is something which is not clear to you, ask. No question is a silly question if you didn’t understand it. Quench your thirst to learn by being proactive, taking your own initiative to inform yourself, attend investment seminars and presentations, search the internet for those unanswered questions.
For those who claim they do not understand in investments, they will never know unless they start taking an interest and in invest in educating themselves first and foremost.
One of the best pieces of advice I got from one of my first mentors was that “when it comes to investing, nothing will pay off more than educating yourself. It is surely to pay better dividends in the longer term.”
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