4 April 2018

Investing – in horse racing parlance – is a “staying race” not a “sprint”

This is a comment I often make to Hudson members. 

Many investors are looking for the short sprint that will lead to untold riches.  They get seduced by the mantra peddled by many of the so called “investment gurus” about easy money to be made via trading or speculative investing.  

They are always on the look out for the next big thing whether it be crypto currencies, bio medical stocks, or small mining companies or, in the property sector buy and sell “renovators delights”. 

It is always about the ease of the returns and the quick nature of the result. 

Alas if this were true we would recommend this road to all Hudson Members   But this road is an illusion.  It does not exist   You can’t make a “million dollars by next Tuesday” just by placing some well timed market calls.   

And anyone who says you can is looking to take your money with one hand while distracting you with the “gold baubles” with the other. 

Good long term productive investing is achieved by sticking to the fundamentals including the following;  

Spend less than you earn. This concept is as old as time but is the fundamental basis of all successful money management.  

Individuals who follow this mantra would then use the resulting surplus to invest in quality assets.  

Invest for the longer term to take advantage of compounding.  

Use leverage conservatively and within your means. 

Stick to the “middle of the road” where the quality assets are located in shares and residential property.  Don’t be tempted by the lure of claimed high returns for low risk by investing in investments on the “fringe” of the markets.   

Take advantage of taxation benefits if they are available but only if they are consistent with your overall growth goals.

Investment is often a slow burn with rewards racked up slowly over time but can and do accelerate the further you go along the road.  Don’t be tempted by the fast buck.  Success is measured in years not in days or weeks.  

Play the Long Game.           

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