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SUNDAY BUSINESS GUARDIAN www.guardian.co.tt JULY 26 • 2015
Arecent survey con-
ducted by Wells Fargo
has shed new light on
what s on the minds
of the wealthiest
insight into their
biggest money regrets.
The survey questioned 1,983 respondents with
$250,000 or more in investable assets. These
wealthy investors wished they d made better
investing decisions, saved more and spent
less, and stopped to smell the roses along the
way to amassing their nest eggs.
Avoiding mistakes along the way
You may think that investing is easy, but
wealthy investors might disagree.
According to those surveyed, the single
biggest regret for those with six-figure port-
folios is not having done a better job making
investment decisions. That s pretty under-
standable when we consider that many of
these investors built their investment portfolios
during the Internet boom and bust and the
housing bubble pop and drop.
But because it s understandable doesn t
mean that there aren t steps you can take to
minimise this same regret from haunting you
down the road.
Here are some ways that you can limit the
impact of bad investing decisions on your
• Invest in what you know, rather than in
fly-by-night hot stocks with complicated
• Focus on building a long-term portfolio
rather than one for the short term.
• Invest continuously and consistently rather
than in sporadic lump sums that may or may
not be timely.
• Spend more time researching companies,
sectors, industries, and the economy so that
you understand the risks and rewards asso-
ciated with unavoidable economic booms and
Making better financial choices
Although wealthy investors have built up
substantial portfolios, many realise that if
they d started investing earlier and made better
decisions on spending, they d have an even
bigger stash set aside for their golden years.
Thanks to the power of compounding inter-
est---the ability to earn interest on an invest-
ment and then earn interest on that interest
over time---investing when you re young can
result in a huge difference in your portfolio
value as you age.
Consider this point: Investing $500 per
month in a hypothetical investment with a
five per cent annual return over a 40-year
period results in a portfolio worth $725,000;
however, investing that amount over a 20-
year period would net you less than
Because investing early can make such a
big impact on your financial future, it s little
wonder why affluent investors wish they d
been more frugal so that they could set aside
more money sooner.
All work and no play...
Fifteen per cent of wealthy investors wish
they d stopped to smell the roses a bit more
along the way so that they could enjoy their
money more. Although hard work can lead
to financial success, taking time to recoup
and rejuvenate can lead to a healthier and
One way to do that is to spend less money
on material things and more money on expe-
riential things, such as vacations. People who
spend their money on experiences rather than
goods get the most long-lasting enjoyment.
That suggests that taking a family trip is, in
the long run, more rewarding than buying a
Interestingly, taking time to enjoy your
money in this manner may also be a good
Tying it together
Every investor is bound to have money
regrets down the road, but minimising those
regrets could help you amass a larger portfolio
and live a happier lifestyle. Although there s
no guarantee that following this advice will
lead to riches, it s likely a good place to start.
At some point every
investor, trader, or
stock picker has
dreamt of buying a
stock right before some
major news turning
him/her into a retired
After all we buy stocks to see our investment
go up in value, and more than ever we live in
an immediate gratification society. Who would-
n t want to see a drastic increase in their
investment s value happen overnight instead
of over several decades? But investing is, and
should be, a long and drawn out process.
Some investors try to take short cuts to
wealth by trying to time the market. They try
to get in before a stock, an ETF, or the entire
stock market takes off, or they try to get out
before an investment comes crashing down.
If done right the investor participates in all of
the gain with no loss.
Wouldn t that be great? But, doesn t that
sound too good to be true?
It is too good to be true. At least on a con-
sistent basis it is. You might guess right once
in a while, but you won t guess right every
time. But I have great news for you; there is
a way to time the market to lead to substantial
wealth growth over time.
It s called time in the market. You can time
the market by spending as much time as pos-
sible in the market. You stay invested in your
retirement portfolio every single day; you don t
get out because you think a market downturn
is coming, rather, you get in and stay in all
of the time! And you continue to get in the
market by continually investing money in it.
I wonder how many people got out of the
market in 2010, -11, -12, -13, -14 thinking this
market run up has to see a correction soon?
Consider this, we ve seen the S&P 500 Index
nearly double over that time frame and sadly
I know some investors who didn t participate
in that wealth growth because they were trying
to time a market downturn. They guessed
The fact of the matter is a lot of the stock
market s big gains and losses are concentrated
in a just a handful of trading days throughout
the year. You don t see a slow, steady and con-
sistent increase or decrease in the market over
a specific time frame.
Anyone who invests knows the market is
extremely volatile and prone to drastic move-
ments. This makes it even harder to time the
market because you re dealing with a roller
coaster of an investment ride, but it s not like
an amusement park where you hear the click
click click of the chain as you approach the
Consider this example of why
time in the market is what
There s 35-year-old you who decides to
invest $250 a month until retirement at 65;
then there s 35-year-old you who waits until
45 to start investing $250 a month until retire-
ment at 65. Both sets of investments get a
yearly seven per cent return. When you started
at 35 your portfolio s value at 65 grew to almost
$305,000, but when you started at 45 your
portfolio s value at 65 grew to just over
$130,000. Simply put time in the market mat-
ters. Time in the market is what will produce
excessive wealth growth for your retirement,
not timing the market.
What you as an investor should be focusing
on instead of timing the market is how to
maximise your time in the market. Fortunately,
the answer is very simple.
Start investing today in a diversified portfolio
of low-cost passively managed investments.
Don t worry if you re buying the market high
for the next year or two. In the long-run it
won t matter, and don t forget as investors we
invest for the long-run, while others (market
timers) trade for the short-run.
If your time horizon is long enough to sup-
port equity investing even at today s prices
you will buy in at a much lower price today
than come retirement time. Don t waste your
time and money trying to fight the impossible
to win the market timing battle of predicting
when to buy low and when to sell high. If you
buy today and sell during your retirement you
will do just that and with a lot less effort and
If you don t know if your time horizon is
long enough for equity investing speak with
a licensed investment adviser.
Top regrets of the rich
Who says you
can't time the
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