Six golden rules of investing
Monday, March 16th, 2009
As part of our monthly Market Watch video series, MLC Senior Investment Specialist Natalie Comino presented six golden rules of investing.
Here’s the transcript from her video:
Golden rule number one is never lose sight of the fact that risk and return are related. This is easy to do when we’re in a bull market and double-digit returns are taken as the norm. However if you are looking for higher returns, you have to be willing to take on more risk. This means the value of your investment could change dramatically over a short period of time. The higher this volatility, the riskier these types of assets are.
Over the long term, growth assets like shares and property are expected to earn higher returns. But these investments will be more volatile so you will need a long time horizon and a strong stomach to ride the ups and downs you’ll experience. If you’re not prepared for this, then you might want to consider a more conservative strategy or assets that are expected to earn lower returns but are usually more stable performers, like cash and debt securities.
