Eight tips for freezing your investing fears this Winter

Investing can be intimidating, especially during uncertain times like the present. But instead of letting your investing fears freeze you in your tracks, consider this season as an opportune time to reevaluate your investment strategy, or if you’re new to investing, it’s also a good time to start learning the basics. Here we share eight tips to help you freeze your investing fears.

Educate yourself

One of the most effective ways to combat investing fears is through knowledge. Take advantage of the winter season to expand your investment education. Read articles, books, and even research reports to gain insights into different investment strategies, asset classes, and market trends. Attend webinars or seminars conducted by investment experts to learn from their experiences and gain valuable insights. The more you educate yourself, the better equipped you'll be to make informed investment decisions and alleviate your fears. If you’re new to investing, you might want to have a look at our Guide to Investing video series.

Define your investment goals

 Clearly defining your investment goals can provide a sense of direction and purpose. Spend time evaluating your financial objectives and determining your risk tolerance. Are you investing for retirement, a down payment on a house, or your children's education? Once you have a clear understanding of your goals, you can develop a tailored investment strategy that aligns with your objectives. This clarity will help alleviate fears by providing a roadmap for your investment journey.

Diversify your portfolio

 Diversification is a key risk management strategy that can help reduce the impact of market volatility. Ensure your portfolio is well-diversified across different asset classes, industries, and geographic regions. By spreading your investments, you minimise the risk of any single investment negatively affecting your overall portfolio. Diversification can help buffer against market fluctuations and provide a more stable investment experience. A simple way to diversify is to invest in a consistently strong multi-asset fund, such as the M&G Balanced Fund. 

Have a long-term mindset

It's essential to maintain a long-term perspective when investing. While short-term market fluctuations may induce fear, remember that investing is a marathon, not a sprint. Stay focused on your long-term goals. 

Regularly review and rebalance

Regularly reviewing your portfolio and rebalancing it when needed can help keep your investments in line with your desired asset allocation. Set aside time during the winter months to assess your portfolio's performance and make any necessary adjustments. This helps to ensure that your portfolio remains aligned with your risk tolerance and investment goals.

Seek professional advice

If you're feeling overwhelmed or uncertain about your investment strategy, consider seeking professional advice. Financial advisers can provide valuable insights, guidance, and a sense of objectivity. They can help you evaluate your risk tolerance, assess your investment options, and develop a customised plan tailored to your needs. A trusted adviser can also serve as a source of support during periods of market volatility, providing reassurance and helping you make informed financial decisions.

Stay invested

History has shown that markets eventually recover from downturns and that patient investors who stay the course are rewarded in the long run. Use the winter season to reinforce your commitment to your long-term investment goals and resist the temptation to make impulsive decisions based on short-term market movements. Remember that investing is a journey that extends far beyond the winter.

Get your taxes in order

In South Africa, tax season for individuals begins in the middle of winter, on the 1^st of July each year. Consider consulting with a tax professional to explore tax-efficient investment strategies such as maximising your contributions to retirement accounts to enhance your investment returns and reduce your overall tax liability.

As winter settles in, don’t let fears freeze your investing progress.  Embrace the opportunities that this season presents, whether it’s to deepen your knowledge, recalibrate your portfolio, or optimise your tax situation.

For further information about M&G Investments and its funds, or to start investing, contact your financial adviser or our Client Services Team on 0860 105 775 or email us at info@mandg.co.za