Protecting your wealth in good times and bad

With markets at all time highs and increasing concerns about a market correction, it’s worth talking about how to protect all that wealth you’ve been accumulating over the past 18 month.

Let’s start with a few basics you need to get right.

Set your goals

You have goals. Every sportsperson has a goal – win a gold medal, make the final or make the team. They are clear, definable outcomes that measure success. You shouldn’t play the sport of capitalism or share trading any differently.

So maybe you want a new jet-ski. Or maybe you’re aiming higher… a new car, a new house or a comfortable retirement. Whether you know them or not – we all have them. And if you don’t know them, stop reading now. Go set some financial goals.

You know your risk tolerance

While the bet on Afterpay may have turned out well this week for early investors, it could easily have gone in a different direction. Ask yourself – what is your tolerance for risk? Would you be ok to lose $10,000 or $20,000 or what if your portfolio fell by 50% tomorrow? What is the level of risk you are willing to take on?

Luck doesn’t last forever

We’ve seen many new investors enter the market and enjoy an unprecedented bull market over the past 18 months. Whether you were lucky with your timing or lucky in picking ‘winners’ like Afterpay or a combination of both – it won’t last forever. At some point there will be a correction, or an increase in volatility. What becomes important then is doing the hard work.

Are you committed to do the hard work?

If you answered ‘I don’t know’ or ‘maybe’ to any of the above… you need to go and see a financial adviser. Investing advice is a lot like medical advice, with professionals. So don’t do it yourself just because it’s cheaper.

Now what?

So you have goals, you understand your risk tolerance you can manage and you are prepared to put some effort in.

Now you can consider what sort of investments to make.

And to do that effectively, it is vital you have vast amounts of knowledge. Or failing that, information. Of the latest kind. And the more the better, and the more often the better.

Not just the news on you stock, but all news, everywhere, all of the time. The ‘butterfly effect’ is rarely more apt than in the share market and the only way to truly succeed is to soak up all that information, before working out what is noise and what is real.

You might think this is over doing it. But consider Z1P this week, its share price went up when there was a bid for its rival Afterpay. Even though they are similar businesses, the fact that it was Afterpay and not Z1P being acquired could devalues the potential of Z1P. Or conversely, it may actually be good for Z1P because it proves the business model has global potential. You need to understand the news and analyse the likely scenarios that could emerge. And then you need to consider ways to minimise your losses in case you are wrong.

How do I get the best information? That is where your share trading platform comes in. Working for you, to give you the tools and resources that help you filter all this information into valuable insights. Remember:

  • Live-streaming pricing is better than live-pricing is better than 20 minutes delayed pricing.
  • Technical indicators and multiple chart types are better than line-charts are better than no charts.
  • Live-streaming expandable market depth is better than live depth is better than no depth at all!

At Marketech our platform is about technology, providing you the tools and technology to trade. You get you live pricing, live charts, live market depth and tools and trading capabilities on your mobile phone or PC. All the information at the tip of your fingers, whenever and wherever you are – exactly what is needed!

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