Tuesday, 22 November 2022
Written by MYTHEO
How can people endure market crashes and stay invested?
That was a key question that Matthew Stuart-Box, Chief Investment Officer of MYTHEO, answered on BFM Radio's Ringgit and Sense.
To learn about all this and more, listen to the podcast:
The podcast is also available on all major podcast platforms, including Apple Podcasts, Spotify, and Google Podcasts.
However, if you don’t have 20 minutes to listen to the podcast, here are 3 key takeaways:
1) Traditionally, investors tend to have a home bias when it comes to investing, with the perception that it is less risky and that they may have the chance at better returns. As Matthew tells BFM Radio, this might make sense when it comes to riskier individual stock investing in the country that you know, but makes less sense when looking at a more balanced portfolio or asset allocation.
2) No matter how diversified you are, you can never get rid of all risk. There will always be some element of market exposure and market risk when investing, and this is something that is not in our control. Instead, what we have absolute control over are our financial behaviors - when we invest and how much we invest. A combination of dollar-cost averaging and smart diversification can be a key way to manage market volatility.
3) We are our own worst enemy when it comes to investing. Human emotion and bias can detract us from the simple but effective combination of smart diversification and regular investing, oftentimes tempting us to make emotional, in the moment decisions to alleviate the pain of an investment in the red. However as market history shows us, markets will bounce back in time, and often surpass previous highs. That’s why MYTHEO has stripped away the human emotion and bias in our investing strategy, tapping into the power of algorithms and ETFs to build and maintain our portfolios.
The Bottom Line
In the long run, investors are better off staying in the market, investing regularly (dollar-cost averaging), and staying smartly diversified.
Like Matt said, we are our own worst enemies when it comes to investing. Take the emotion out of investing today with MYTHEO. Get started here.
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