Sunday, 11 December 2011

The benefits of having an investment philosophy and strategy

The benefits of having a strategy to support your investing are:
- the removal of subjectivity
- consistency in your investment decisions
- the ability to repeat your successes and avoid repeating your mistakes.

A strategy is simply a set of rules or guidelines that are adopted consistently over time.  Having a strategy does not prevent you from having losses though.  By documenting your approach to investing you can help remove the emotive element to making a decision by ensuring that you have developed a solid argument to support your investment decision.  Another advantage of having documented your approach to decision making means that your have a record of how you achieved your successful results to help you repeat them.

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