It's not the time to ignore the investment clock

By Dale Gillham. Published at Aug 7, 2020, in Investor 101

When looking to grow an investment portfolio, I often find that investors blindly follow the herd looking for the best bang for their buck. I also find that investors are focused on income rather than capital growth from their investments, but smart investing is about the total return you receive.

Many are asking in the current COVID-19 environment where they should be investing, and, in my opinion, the answer is simple. As the renowned Warren Buffett famously states, 'buy in doom and sell in boom'. Traditionally investors turn to property as their preferred investment, but when looking at the recent research, depending on the area where you want to invest, property prices are forecast to be flat or down.

Furthermore, in this low interest rate environment and uncertain recessionary market, property prices may be subdued for quite some time. So, is this the right time to be buying property or should you stay away?

To understand where and when you should be investing, I always recommend investors consider the investment clock or what is otherwise known as the economic clock. I say this because smart investors diversify their investments across several asset classes including property and shares among other investments.

The idea is to look for opportunities in asset classes that are underperforming and likely to move with the next phase of the economic clock. In short, you are looking to buy just before the asset begins to rise not after it has already risen.

Sadly, too many investors are indecisive when it comes to investing and jump from one investment to another hoping to get into the next best thing after it has already risen strongly.

Right now, the investment clock has ticked well past property as an asset class and, therefore, now is the time to start looking at gaining exposure in this area. In regards to the share market, many sectors have been underperforming for quite some time that may present some great buying opportunities for the astute investor.

Remember, understanding when the right time to enter an asset is very important, as you want to gain a solid return from both income and capital gains. That said, what is even more critical is knowing the right time to exit. In my experience, investors tend to hang onto poor performing asset classes or hang on way too long in the hope they will perform better. As Buffett states, 'sell in boom and buy in doom', which means buy when assets are priced low and sell when they are high because this way you will avoid the ugly rollercoaster ride that the majority of investors endure.

Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au


Where to invest $1,000 right now

When the experts at Next Investors have a stock pick, it may pay to listen.

The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.

They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.

Click the link below to see what they are currently investing in.


SEE THE PORTFOLIO

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!

X