I was sending my sister to work the other day. Along the way she started telling me about her day ahead.
She had four meetings to attend that day, two in the morning and two in the afternoon. After the day is through she would have met with her bosses, the vendors, the staff within her department and colleagues from another department.
It was by no means a very uncommon day. Meetings tend to occupy a large part of her working hours.
[Free Ebook] How should you invest your first $20,000?
We asked 14 Singapore finance bloggers to share what they would do if they could go back in time and invest their first $20,000. They can no longer rewind time, but you can learn from their experience and hopefully start with a better footing.
A thought struck me there and then.
If she spends so much time in meetings, then how well she does at meetings define how well she does at her job. If meetings define her job, should she not learn how to chair and attend meetings better? Would it not help her to perform at her job more effectively?
What then define us as investors?
As investors we make decisions all the time.
Some decisions we do not make very often but they are important and have lasting implications. We need to decide on an investment strategy, one that is suitable for our risk appetite, personality and circumstances; one that we are able to execute and see through.
We need to decide on the make up of our overall portfolio and how much of each asset class to own. We need to decide if we are going to purchase an investment property, committing a large amount of capital for a long period of time.
Other decisions we make a lot more often. We need to decide what stocks to buy and what stocks to sell. We need to decide how much of each stock to buy and how much of each stock to sell. We also need to decide when to buy and when to sell.
There are trivial decisions as well. For example, we need to decide which broker offers the best platform and commission rates and eventually who we want to trade with.
Some decisions are easy. We often have no qualms about buying the hottest stock in the market right now because everyone is talking about it. Other decisions make us uncomfortable, especially when it comes to selling a stock we bought ten years ago but is now trading at half the price it was then.
Some decisions are quick, we would sign up immediately to listen to that ‘guru’ speak about market outlook. Others we debate with ourselves for a long time, such as paying seventy dollars to purchase a book about investing.
As investors we are constantly deciding. We decide after analysing the information that comes to us – market news, analyst reports, articles from financial bloggers etc. We decide after considering our options. We often decide based on our emotions.
Even postponing a decision and choosing a course of inaction is a decision in itself.
As investors, it is our ability to consistently make good financial decisions that define our success.
If decision making is the be all and end all of an investor’s existence, should an investor not learn how to make better decisions from the very start?