In the fast-paced world of investing, where markets can be up one moment and down the next, it's easy to feel overwhelmed. There’s a lot to take in, many different viewpoints, and no one specific place to begin. But fear not - armed with the right knowledge and a smart strategy, you can confidently navigate the investment landscape and set yourself up for long-term success.

If you're thinking about starting your investment journey, but  don't know where or when to begin, you might be tempted to look at last year's top performers and think they hold the key to future success. However, unlike a normal schedule, where predictable outcomes happen at certain times of the day – like peak hour traffic or the nightly news - investing is unpredictable. What was the best investment last year is unlikely to be the best again next year.

The Trap of Chasing Past Performance

It's tempting to rely on past performance when making investment decisions, but this strategy can be misleading. The market is dynamic, and various factors influence performance from year to year. Chasing last year's winners can lead to missed opportunities and increased risk.

Why Timing the Market is a Gamble

Another common mistake is trying to time the market—buying low and selling high. While it sounds simple, predicting market movements is incredibly challenging. Even seasoned investors struggle with market timing. Instead of trying to outguess the market, a more effective approach is to focus on consistent, long-term investing, using time and starting early.

The Power of Investment Fundamentals

If past performance and market timing aren't reliable strategies, what should you focus on? The answer lies in some time-tested investing strategies and understanding investment fundamentals. Over the long term, factors such as a company's earnings, growth potential, and economic conditions become more significant. Here are some key investment fundamentals to consider:

Diversification: Spread your investments across different asset classes (equities, bonds, real estate, etc.) to reduce risk. Diversification helps cushion your portfolio against inevitable market volatility, where one year your investments may rise five or ten per cent, and the next they may fall by ten or twenty percent or more.

Risk Tolerance: Understand your risk tolerance—how much risk you're willing and able to take. Younger investors often have a higher risk tolerance because they have more time to recover from market downturns.  

Investment Horizon: Consider your investment horizon—the length of time you plan to invest before needing the money. A longer horizon allows for more aggressive investments, while a shorter horizon may mean more conservative choices are better suited to your circumstances.

Regular Contributions: Make regular contributions to your investment portfolio. Consistent investing, regardless of market conditions, can smooth out the impact of market fluctuations. This is a terrific benefit of superannuation, where you contribute a portion of your salary over an extended period.

Quality over Quantity: Focus on the quality of investments rather than the quantity. Investing in well-established companies with strong fundamentals can provide more stability and growth potential.

The Smart Way to Start

If you're new to investing, a curated investment portfolio can be an excellent way to begin. These portfolios are designed by experts who consider the best investment strategies tailored to your needs and goals. By leveraging professional expertise, you can make informed decisions without the guesswork.

The Key Take-aways

Starting your investment journey doesn't have to be daunting. Remember, using last year's best performer isn't a smart strategy, nor is trying to time the market. Instead, focus on long-term investment fundamentals that align with your goals and risk tolerance. With a curated investment portfolio, you can confidently make smart investment decisions, even if you're short on time and knowledge.

Ready to take the first step towards smart long-term investing? Our curated investment portfolios are designed to help you achieve your financial goals without the hassle. Get started today and let your investments work for you!