Throughout their financial journey, investors will have to face decisions influenced by both controllable and uncontrollable events. Getty Images
Throughout their financial journey, investors will have to face decisions influenced by both controllable and uncontrollable events. Getty Images
Throughout their financial journey, investors will have to face decisions influenced by both controllable and uncontrollable events. Getty Images
Throughout their financial journey, investors will have to face decisions influenced by both controllable and uncontrollable events. Getty Images


Why a calm investment philosophy is key to financial success


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December 01, 2023

Investing is a long-term commitment and those who effectively manage family finances often dedicate decades to achieving their goals.

However, the path of an investor is multifaceted, involving complexity, challenges, frustration and occasional fear.

Our philosophy is “stick with your plan”.

Although simple, it’s not easy, and prompts a crucial question: How can investors sustain discipline amid various market conditions, political unrest, economic volatility or any crisis that jeopardises the pursuit of their goals?

Throughout their financial journey, investors confront decisions influenced by both controllable and uncontrollable events.

Without a steadfast guiding philosophy, stress becomes inevitable, potentially leading to detrimental choices that hamper long-term financial well-being.

Often, when outcomes fall short of expectations, blame is directed towards external factors – government, central banks, markets and the economy – rather than self-reflection on responses and decision-making accountability.

Success comes in how we manage our responses to events, not attempting to control the events themselves, according to experts.

Viktor Frankl summarised this beautifully in his book, Man's Search for Meaning, when he said: “Between stimulus and response, there’s a space, in that space lies our power to choose our responses, in our response lies our growth and freedom.”

Think of this equation: Event + response = outcome.

Could an outcome – either positive or negative – be the result of how you respond to an event, and not just the result of the event itself?

This would mean events, while important, don’t exclusively influence outcomes (if this were the case, everyone would have the same outcome regardless of their response).

Consider applying this concept to your investments.

Event: A significant shock, like a bank failure, triggers a market decline.

Response: Fuelled by negative media coverage, there may be a temptation to sell some, or all, of your investments.

Outcome: Succumbing to short-term news can result in missing a market recovery, causing anxiety about when to re-enter, as well as suboptimal returns.

Now, a different perspective.

Event: A bank failure causes a market downturn.

Response: Grounded in a long-term understanding of market fluctuations, emotions are managed and the investment plan remains unchanged.

Outcome: The market rebounds and the investor who maintained discipline reaps rewards missed by those swayed by short-term reactions.

Same event, different outcome based on response. This is why having an investment philosophy is so important.

By understanding how markets work and maintaining a long-term perspective on past events, investors can focus on ensuring that their responses to events are consistent with their long-term plan (often a 40 or 50-year plan and not a one or two-year one).

A philosophy should be grounded in principles supported by decades of empirical academic evidence – trust in markets, forward-thinking (at least five years), diversification and controlling the controllable.

These principles instil confidence during market events, even amid global shifts.

Adherence to these principles is essential in countering claims that “it’s different this time”, preventing impulsive decisions based on fear or uncertainty.

While challenging, adhering to these principles safeguards investors against succumbing to investment fads or scams (even the most self-aware find it hard to manage their own responses to events).

Investing is perpetually enticing and intimidating, but with a strategic approach and guidance from a fiduciary, you can navigate challenging times.

If you’re feeling a sense of drift in terms of your journey, or recognise some of the above scenarios in yourself, talk to a fiduciary.

Sometimes, a supportive conversation is all you need to help increase the probability of having a successful financial outcome.

Sam Instone is co-chief executive of wealth management company AES

Tips for job-seekers
  • Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
  • Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.

David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
The National's picks

4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young

From Zero

Artist: Linkin Park

Label: Warner Records

Number of tracks: 11

Rating: 4/5

RESULTS

5pm: Maiden (PA) Dh80,000 1,400m, Winner SS Lamea, Saif Al Balushi (jockey), Ibrahim Al Hadhrami (trainer).

5.30pm: Wathba Stallions Cup Handicap (PA) Dh70,000 1,400m, Winner AF Makerah, Sean Kirrane, Ernst Oertel

6pm: Handicap (PA) Dh80,000 1,600m, Winner Maaly Al Reef, Brett Doyle, Abdallah Al Hammadi

6.30pm: Handicap (PA) Dh90,000 1,600m, Winner AF Momtaz, Antonio Fresu, Musabah Al Muhairi

7pm: Handicap (PA) Dh80,000 2,200m, Winner Morjanah Al Reef, Brett Doyle, Abdallah Al Hammadi

7.30pm: Handicap (TB) Dh100,000 2,200m, Winner Mudarrab, Jim Crowley, Erwan Charpy

While you're here
Ferrari 12Cilindri specs

Engine: naturally aspirated 6.5-liter V12

Power: 819hp

Torque: 678Nm at 7,250rpm

Price: From Dh1,700,000

Available: Now

While you're here
City's slump

L - Juventus, 2-0
D - C Palace, 2-2
W - N Forest, 3-0
L - Liverpool, 2-0
D - Feyenoord, 3-3
L - Tottenham, 4-0
L - Brighton, 2-1
L - Sporting, 4-1
L - Bournemouth, 2-1
L - Tottenham, 2-1

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%3Cul%3E%0A%3Cli%3ENever%20click%20on%20links%20provided%20via%20app%20or%20SMS%2C%20even%20if%20they%20seem%20to%20come%20from%20authorised%20senders%20at%20first%20glance%3C%2Fli%3E%0A%3Cli%3EAlways%20double-check%20the%20authenticity%20of%20websites%3C%2Fli%3E%0A%3Cli%3EEnable%20Two-Factor%20Authentication%20(2FA)%20for%20all%20your%20working%20and%20personal%20services%3C%2Fli%3E%0A%3Cli%3EOnly%20use%20official%20links%20published%20by%20the%20respective%20entity%3C%2Fli%3E%0A%3Cli%3EDouble-check%20the%20web%20addresses%20to%20reduce%20exposure%20to%20fake%20sites%20created%20with%20domain%20names%20containing%20spelling%20errors%3C%2Fli%3E%0A%3C%2Ful%3E%0A
The biog

Born November 11, 1948
Education: BA, English Language and Literature, Cairo University
Family: Four brothers, seven sisters, two daughters, 42 and 39, two sons, 43 and 35, and 15 grandchildren
Hobbies: Reading and traveling

F1 The Movie

Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem

Director: Joseph Kosinski

Rating: 4/5

How Filipinos in the UAE invest

A recent survey of 10,000 Filipino expatriates in the UAE found that 82 per cent have plans to invest, primarily in property. This is significantly higher than the 2014 poll showing only two out of 10 Filipinos planned to invest.

Fifty-five percent said they plan to invest in property, according to the poll conducted by the New Perspective Media Group, organiser of the Philippine Property and Investment Exhibition. Acquiring a franchised business or starting up a small business was preferred by 25 per cent and 15 per cent said they will invest in mutual funds. The rest said they are keen to invest in insurance (3 per cent) and gold (2 per cent).

Of the 5,500 respondents who preferred property as their primary investment, 54 per cent said they plan to make the purchase within the next year. Manila was the top location, preferred by 53 per cent.

if you go

The flights Fly Dubai, Air Arabia, Emirates, Etihad, and Royal Jordanian all offer direct, three-and-a-half-hour flights from the UAE to the Jordanian capital Amman. Alternatively, from June Fly Dubai will offer a new direct service from Dubai to Aqaba in the south of the country. See the airlines’ respective sites for varying prices or search on reliable price-comparison site Skyscanner.

The trip 

Jamie Lafferty was a guest of the Jordan Tourist Board. For more information on adventure tourism in Jordan see Visit Jordan. A number of new and established tour companies offer the chance to go caving, rock-climbing, canyoning, and mountaineering in Jordan. Prices vary depending on how many activities you want to do and how many days you plan to stay in the country. Among the leaders are Terhaal, who offer a two-day canyoning trip from Dh845 per person. If you really want to push your limits, contact the Stronger Team. For a more trek-focused trip, KE Adventure offers an eight-day trip from Dh5,300 per person.

UAE currency: the story behind the money in your pockets
UK-EU trade at a glance

EU fishing vessels guaranteed access to UK waters for 12 years

Co-operation on security initiatives and procurement of defence products

Youth experience scheme to work, study or volunteer in UK and EU countries

Smoother border management with use of e-gates

Cutting red tape on import and export of food

Benefits of first-time home buyers' scheme
  • Priority access to new homes from participating developers
  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
  • DLD registration fee can be paid through banks or credit cards at zero interest rates
UAE currency: the story behind the money in your pockets
How to wear a kandura

Dos

  • Wear the right fabric for the right season and occasion 
  • Always ask for the dress code if you don’t know
  • Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work 
  • Wear 100 per cent cotton under the kandura as most fabrics are polyester

Don’ts 

  • Wear hamdania for work, always wear a ghutra and agal 
  • Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Updated: November 13, 2024, 1:13 PM`