INVESTOR INTELLIGENCE
4 . START OR STICK TO A SAVINGS STRATEGY
While investing is one of the proven ways of growing personal wealth , successful wealth creators are also aware of the importance of including savings as part of that strategy . Having a sound savings system in place when markets decline allows you to easily increase cash inflows and limit cash outflows , without having to sell out of your stock holdings . In an increasing-interest-rate environment , a large savings component can also help lessen the sting of investment losses by increasing the earnings on your savings capital . If nothing else , this can be a good buffer against emotionally driven investment decisions .
5 . IF YOU ’ RE GOING TO BUY , DIVERSIFY
Contrary to widely held beliefs , a market downturn is not automatically a good time to buy stocks . That ’ s because it ’ s impossible to call the bottom of a bear market , so buying on a downtrend can actually end up costing you a lot of money . However , that ’ s not to say that investing for diversification purposes is a bad thing in times of poor market performance , provided you keep in mind that such diversification isn ’ t possible through equity investments only . If nothing else , the current market challenges serve as a reminder that successful investment portfolios comprise a broad variety of assets , ranging from
70 SEPTEMBER 2022 SA Real Estate Investor Magazine