Investment Principle #2: Stick To Your Knitting - Top 10 Investment Rules | Absolute Wealth Advisers

It is crucial to know what you excel at and what you don't. This understanding helps you focus on your priorities. By doing this, you can spend your time on the most important things in life.

Absolute Wealth Advisers understand the value we add. Research shows that financial planners can enhance your returns by 3% to 4% per annum. This knowledge allows us to concentrate on activities that provide the most value to our clients.

Key Activities for Value Addition

We focus on several key activities, including:

• Asset allocation

• Cost-effective implementation

• Portfolio rebalancing

• Behavioural coaching (sticking to a long-term plan and avoiding panic selling or greed buying)

• Tax-effective strategies

  
  

Interestingly, stock selection and market timing are not part of our strategy. Research indicates that these activities contribute little long-term value.

Our Approach: Sticking to What Matters

We believe in sticking to our knitting. Our time is spent understanding our clients' goals and fears. We create long-term strategies to achieve their objectives while mitigating their concerns.

Our team manages the implementation of your holistic financial plan. We handle your investments using simple, tried-and-tested methods (see lesson No. 1). This approach allows you to sleep easy at night, optimising your chances of success while minimising the risk of failure.

Reclaiming Your Time

By taking the lead in these areas, we give you back precious time. You can spend it on what truly matters: relationships, hobbies, and holidays.

We do not engage in micro stock picking or frequent buying and selling of stocks or funds. Investing is a full-time job. It requires time, skill, and access to expensive research. Therefore, we outsource this activity to managers with proven track records of long-term success.

The Power of Compounding Returns

We let time and the “8th wonder of the world” (compounding returns) do the heavy lifting. This is where behavioural coaching plays a vital role. It can be tempting to “fiddle” with your investments—selling this, buying that.

However, most of this fiddling tends to destroy long-term value. Sticking with a tried-and-tested strategy is often more beneficial (see lesson number 1).

Focus on Your Strengths

Finally, we encourage our clients to stick to their knitting. If you excel at your job or business, focus your time and energy on making money in that area. Spend your efforts on what adds the most value to your life.

We do not believe in trying to be a jack of all trades. Competing with full-time investment professionals on a part-time basis is often unwise.

Want to feel confident about your financial future?

At Absolute Wealth Advisers, we help you optimise, grow, protect, and share wealth with purpose. Our goal is to ensure you can live well today while leaving a lasting legacy for tomorrow.

For more guidance on protecting your wealth with confidence, book a chat with our team.

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