In times of crisis, staying focused on the bigger picture is critical. “We too often see investors obsess over fund performance numbers. Yet, there seems to be little cognisance of the fact that, even if you were to find the best fund portfolio, odds are the average investors’ experience will be very different,” says Adriaan Pask, CIO at PSG Wealth. He explains that it is because investing is a process that is susceptible to emotional interference. “Investors rarely remain unswayed by news or market movements. Instead, they tend to panic and make poor decisions.”
This means that although the fund manager is performing well, the investors are not using the product correctly, and therefore not extracting full value. This is exactly where a good financial adviser can be very valuable. “In tough times an adviser should guide the investor on how to avoid mistakes, with buying high and selling low topping the list of expensive mistakes investors typically make during tough times,” according to Pask. Keeping a rational, long-term perspective is more important than ever and will help investors achieve their investment goals in a post-COVID world.
Click here to read Pask’s insights on the relevance of global and local investments during challenging times.
