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EP56- Female Financial Independence Series: Avoiding temptation for better long-term investing

In today’s episode, I am joined with Shane Balkman, the Chief Investment Officer who is responsible for communicating investment strategy to all stakeholders as well as overall responsibility for the investment team. He joined the team at YOU Asset Management Inception when it was called for investments in 2012. He also founded equip solutions, which is a genesis of YOU and has been managing YOU’s flagship, their flagship in active models since then, active models means an investment portfolio. Shane is a chartered fellow of the Chartered Institute of Securities and Investment and a member of the CFA UK society. We are talking about timing the markets, how to start investing, and avoiding temptation for better long term investing.

When investing, we are founded by the saying it’s not about timing the market but It’s about the time in the market. So basically, it is not when’s the best time to invest but it is the longevity. Having the mindset of being comfortable with the ups and downs, to tame fear and greed is critical which means ​​the longer you stay invested, the probability of getting a better return massively increases. Does it matter “when” you invest? And the answer is yes and no. If you’ve got a really short time horizon and are investing for a year, then the timing of when to invest massively matters. If you’re going to invest for 10 years or more, when you start investing really doesn’t matter.

Normally, we put too much emphasis and weight on the game not on emotion and that’s where we can make better decisions. When people are feeling fear and capitulation and depression this is the time of maximum financial opportunity. Ironically, when you’re buoyant, and brilliant and ecstatic, that’s the time for financial maximum risk. 

Personally investing in the stock market and picking an individual share is a risk and reward trade off because it’s a binary outcome. When picking a company to invest in, pick a stock in a company that you know. Make sure to not to invest money you can’t afford to lose. When investing in stocks, always see it as a long term investment.

Investing in stocks is like being in a race that has no finish line. There’ll be times when your portfolio is down, or the market is not in the right place, and you just have to keep it together and push through. What’s best to do is identify your best informed target number, be it target share value or target dividend income that once you reach there, whatever happens, you’re not going to run out of money. 

Whilst in portfolio management, it is a management of  a basket of lots of shares within lots of funds. It is  looking at, over the long term and identifying what are the best areas on a probability to make money such as UK, Europe, US, Japan, emerging markets, and then put money in those areas based on the investor’s level of risk. And portfolio managers can help you do that to bring together the best of the best to create a really well diversified and good returning portfolio. 

When looking for long term investing and building a portfolio, one of the best firms that can help you out is YOU. A firm centered around you, the client. And the firm’s ethos is whether developing new products, thinking about making changes to the asset location, or some of the fun changes underneath, the focus is the client outcome especially when writing the firm’s quarterly reviews or factsheets. YOU is driven by how to make the best client outcome possible.

At the end of the day, there is no best time to invest but NOW. What matters is the period of time you stay invested. If you are not sure, should you start investing? Just start.

Listen to the full podcast here

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