Pragmatic Investing is an approach to investing money by using a sensible methodical diversified strategy. This is achieved by focusing on the fundamentals and avoiding short term market sentiment and noise, by using a realistic approach to investing.
Key Pragmatic Investing Points
I believe in 7 key points when investing money.
- Understand the parts of your portfolio and establish realistic expectations of the Asset Class.
- Have a diversified set of funds blended together to create a controlled risk adjusted return.
- Focus on fundamentals at stock and economic level and have a realistic time horizon for investing in stock markets.
- Concentration on what you know and not what you don’t know.
- Don’t be drawn on short term sentiment or trying to second guess markets.
- Some things will go down at points, remember though this often provides good fund managers good buying opportunities for longer term benefit.
- Be patient and don’t react in haste.
I do not profess to be able to time when to invest into the stock markets. Indeed many people have tried and failed to do this over the years. What I have learnt is to take a sensible pragmatic approach to build diversified blended portfolios. This will help adjust to different moments in the economic and business cycles.
Stock market investing should be viewed as a 5 to 10 year investment depending on the level of risk and return expectations. There may be times during these years, where fundamentals in markets may change and small changes may provide a greater risk/return opportunity.
I intend to use the blog to educate around some of the jargon used in the industry, by using plain English and examples using real life scenarios. I hope in time this will help take away some of the behavioural finance aspects to investing and ultimately the short term sentiment drifts.
If there are any areas you would like to know more about please contact me.