Investing seems scary especially in the current market conditions under the Russian-Ukraine geopolitical issue and when lives are at stake.

Is there such thing as investing with a peace of mind? How is that even possible?

It takes a lot of education to understand how markets work based on evidence and science and how you can use it to your advantage. Part of the reason why you may not be having a peace of mind is that you do not have a clear plan of strategy in mind. You are only investing on news and emotions to achieve high returns, rather than with a clear plan to get you to where you want to get to.

What is your real objective?

Go back to your main plan of what is the real objective you are trying to invest in the first place. If it is to achieve the highest returns, please do not read any further. This will not make sense to you.

If you are like most people, you know that one of the key reasons is to be able to build wealth for the lifetime consumption you are going to have based on your personal individual goals you set for yourself. It could be sending your kids to a tertiary education, or paying for a down-payment for a car in the next 5 years, or your retirement funds over the next 10-15years. Sometimes, it could be to build a legacy for your children and give to the family or charity of choice.

Build a portfolio that can withstand the test of time, regardless of the crisis

Design and build a portfolio based on your desired goals you want to achieve and ensure that it can withstand the test of times when crisis comes. When you have a portfolio that is globally diversified across the world, you minimize the risks of losing all your money, because even when a global crisis occurs, there are still some businesses that can be making profits and growing in the midst of crisis, just like what we saw in the Covid-19 situation in 2020. But if take on over-concentration risks, you might run the risk of creating havoc and emotional stress on ourselves and our portfolio.

Expected the unexpected

There is risks in investing, but there is also a way to take on calculated risks only. Take off the idiosyncratic risks that can occur in any company or country or sector by way of diversification. Once that risk is minimized to the point where it is at the lowest, then expect that some volatility will be the price to pay for an increased premium of returns, depending on your time horizon. That is the way to reduce your risks while capturing the upside by finding evergreen strategies to always outperform the markets through smaller companies, higher profit companies and reasonably priced companies. Rebalancing is key to realize the profits and reposition them to continuously buy into the value, smaller and profitable companies.

Reframe the way you invest

The way most of us invest is driven primarily by emotions and what the industry has caused us to think, which is that we are smarter than the markets, so we will be able to forecast and predict the future. While a person could be lucky once in a while, it is a futile exercise if you stretch that time horizon longer because the reality is that a person is able to do that in a flip of a coin. Instead, we use research materials to understand how markets work and study the history of markets to apply the science to investing to get us the highest chance of achieving our big long term goals in life so that we can sleep in peace through wars, health crisis, economic crisis, technology crisis and the list goes on.

Put in the hard work

Unlike going to the gym where more action leads to better results. In investing, less active action leads to better results with peace of mind. The hard work in investing is patience and discipline. Patience is the ability to sit through periods of volatility when expected returns may be against your favour. The time will pass when the returns will come back to normalization, just like in the history of all crisis for the past 100 years.. Discipline to stay in the strategy and hold it out even when the going gets tough will be another virtue to have. You probably can imagine that there will be another way to make a “Quick buck” through alternative new strategies that will constantly come up. Staying invested using evidence-strategies proven for almost a 100 years keeps us disciplined. We need to stay the course, and not keep changing lanes to avoid an accident in our investment portfolio.

Finally, speak with an experienced investment advisor who looks into what it is you are trying to achieve personally and see if they can help you to reframe the perspectives of financial planning to get you to your big goals in life.