Successful investing hinges on many factors. Some can't be controlled – the returns of the markets, for example. But others can be. By following these four principles you can focus on the factors within your control, which can be an effective way to achieve long-term results.

Focus on what you can control

It’s very easy, and very tempting, to focus on the markets, the economy, manager ratings or the performance of individual funds. This may lead you to overlook the basic principles that we believe can give you the best chance of success.

These principles rest on a simple idea: Focus on what you can control.

Goals

Create clear, appropriate investment goals.

The investment process begins by setting measurable and attainable investment goals and developing plans for reaching those goals.

Balance

Develop a suitable asset allocation using broadly diversified funds.

A successful investment strategy starts with an asset allocation suitable for its objective. Investors should establish an asset allocation using reasonable expectations for risk and potential returns. The use of diversified investments helps to limit exposure to unnecessary risks.

Cost

Minimise cost.

You can’t control the markets, but you can control how much you pay to invest. Every pound that you pay in costs and charges comes directly out of your potential return.

Indeed, research suggests that lower-cost investments have tended to outperform higher-cost alternatives.

Discipline

Maintain perspective and long-term discipline.

Investing evokes emotion that can disrupt the plans of even the most sophisticated investors. Some make rash decisions based on market volatility. But you can counter emotions with discipline and a long-term perspective. This can help you stick to your plan.

At FFP we have an evidence-based investment philosophy built around these four principles and if you are interested in finding out more about investing or how building a financial plan can help you achieve your long term goals then please get in touch.

June 2021