Investa Asset Management LLC
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Money Management

What it takes to invest successfully  

Unless you have the knowledge, time, patience, and temperament to invest wisely, you will benefit from professional advice. If you are lacking one or more of these skills, then you face becoming one of the majority of individual investors who constantly underperform their own investments and fail to reach their financial goals. A little knowledge is truly a dangerous thing when investing, and is tantamount to gambling unwittingly with one’s investments.

Successful investors have emotional intelligence

Successful investors know that the market does not reward them for what they know but for what they do. There is only aa weak relationship between investment performance and investor performance. Knowing what to do, and more importantly, what not to do at different parts of the investment cycle, comes only from experience and learning.  It matters not what your investments do next but what they ultimately do. At the end of an average investor’s life, less than 5% of his (or her) total lifetime return will have come from what his or her investments did versus other similar investments: the other 95% will come from how the investor behaved. The primary determinant of that behavior will be the quality of the advice he or she got, or didn’t get.

How you manage (buy/sell/hold) your investments you matters as much or more as choosing the right portfolio. “Equity bear markets are periods during which common stocks are returned to their rightful owners” is an old truism. History has consistently proved that the great risk of American stocks comes from not owning them.

Successful investors avoid making the emotional mistakes that hurt the majority of individual investors.  Most individual investors invest using a rear view mirror – often buying after a rise and selling after a fall. Warren Buffett says he gets greedy when everybody gets frightened and frightened when everybody gets greedy.

Successful investors know they became good investors not by watching current events but by learning from history. They use patience to their advantage, and know that over time the genius of capitalism and the upward bias of markets are on their side. Buffett and other great investors know that optimism is the only view of the future which squares with the experience of the past, and that the safety of equities rises with the time horizon of the capital.

Successful Investors Know That Knowing When To Sell Is As Important As What To Buy

The average individual investor focuses far more on what investments and equities to buy, but far less on the equally or more important decsions of when to sell.  It is why investors chronically underperform the markets.

Successful Investors Use Investment Math to Their Advantage

Successful investors know the best investment plans can only be based on reasonable probability. Wise investors know that knowledge and probabilities work to their advantage. They know what usually succeeds, and why.  For example, mathematically optimism works, pessimism doesn’t. No one can predict the future but you can play the percentages to give yourself faith in the future. Faith not fear, knowledge not blind luck, rewards investors handsomely. Probabilities help eliminate your fears when investing.

Wise investors know that the more variability in the value of an asset class, the higher the overall return the market demands from that asset class. The higher the return, the ‘safer’ the asset class, net of inflation and taxes.

The average individual investor makes the mistake of buying performance despite the fact that this has always proven to be harmful to one’s wealth. There is usually a negative correlation between the top performing mutual funds over the previous five years and those over the next five years. Extrapolation is the poisoned apple for investors because it deceives. The error of extrapolation explains why you can become an immensely successful investor without ever having owned a fund with more than three stars, and why you can easily become destitute investing in only 5-star funds or last year’s hottest sector. It is nearly always a mistake to extrapolate optimism and pessimism, and the great extrapolator is journalism.

Successful Investors Invest For The Future

The Golden Age was never the present age – Disraeli

In the long-term, it isn’t going to be just right it’s going to be terrific.  From its depression low in July 1932, the Dow Jones Industrial Average rose nearly 150 times to over 6000 by 1986 – a period which contained The Great Depression, World War 2, and The Cold War.

That’s why successful investors focus on owning great companies rather than owning stocks – businesses run by some of the highest quality investment managers in the world. The more than two billion people freed from communism since 1989 have an awful lot of catching up to do, offering great potential to leading global companies.

Eighty-five percent or more of all the scientists who ever lived, are still working. No one country has a monopoly on genius, so long-term investors would be wise to ensure they are positioned for economic growth both domestically and internationally.

How Investa Helps You Manage Your Money Wisely

First, you have full control over your assets at all times.  We can help you determine your investment goals and risk/reward parameters, but they have to be your goals and reflect your investing philosophy.  

Your hopes for your family’s future are as sacred to you as ours are to us. We want to be advisors to you and your family for your lifetime and beyond. No one who doesn’t have your last name will ever care about your investment success as much as we do. We are deeply committed to the realization of your financial goals.

Investa possesses the knowledge and experience to help you become a successful investor so that you and your family can have a higher quality of life.  Most people in the investment industry have been in it less than 10 years. Mike Pore and Derek Hoggett have over 50 years of investment experience between them.

As investment mathematicians, we have been trained to find solutions to complex problems and we understand probability.  The best investment plans can only be based on reasonable probability. We put the mathematics of investing on your side – historically what works – helping guide you to greater wealth while lowering your risks. We help you identify and avoid the unnecessary risks that hurt investment returns.

We help you keep your emotions out of your investment decisions, and help take the worry out of your investing.  We advise you of the potential risk and reward for each investment recommendation so you will be better able to ride the fluctuations essential to increase investment returns.

“Rarer than ability is the ability to recognize ability” – Elbert Hubbard.

Experience teaches that ability. Where appropriate, we will help you choose specialty funds to meet your investment goals. Because we are independent money managers, we are free to choose from the many thousands of fund managers.

Investa does not depend on any one investment style or method. History shows that there are periods when a particular strategy or technique produces superior risk-adjusted rates of returns or produces inferior returns. Usually when a particular style or method becomes too popular, it becomes less profitable. Successful investing is both an art and a science.

To read more about our investment philosophy click here.

To arrange for a free consultation about your investment and financial goals, call 512-800-8300, or complete and submit the form below.

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