Common Investing Mistakes To Avoid
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03 June 2021
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We all have our wins and losses especially in the realm of investments. But that’s all part of the ups and downs of life just like markets. However, by practising self-awareness there are some common investment mistakes that we can avoid. 
 
Here are some typical investment don’ts that you should avoid to achieve your wealth goals:- 

Not doing your homework

Never invest in something you don’t understand. It is critical that you do read up and ask questions before putting your hard-earned money to work. Read up the relevant investment or Fund’s collaterals to understand what exactly the underlying asset class is and what you’re getting yourself into.

Following the crowd
The herd mentality is a natural instinct and we can get easily attracted to any information that gets the most attention. This is evident in FOMO (Fear of Missing Out) which can lead to irrational decisions such as blindly chasing market trends. Set your own rules, have your own investment plan, and stick to it.

Not separating your feels
Have a clear distance between your emotions and investments especially when it comes to buying or selling. Being overly exuberant when markets are climbing and panicking when the market declines could derail your long-term investment plan through impulsive decisions that are not rational. Remain calm and stick to the plan.
 
Lacking Patience

Everyone wants a quick buck and to get rich quickly. But as legendary investor Charlie Munger puts it, “It’s waiting that helps you as an investor and a lot of people just can’t stand to wait.” Being a great investor is not necessarily how much you know, but really how you behave. 

Doing Too Much
Call it a case of itchy fingers. But if you find yourself constantly looking and adjusting your portfolio each time markets rise or fall, you’re probably doing too much. Instead, stick to your plan and invest consistently by dollar cost averaging. Trying to time the market usually ends up badly with you getting your fingers burned in the end.

Forgetting to Rebalance
Forgetting to rebalance your portfolio can lead to asset allocation drifts which might result in you taking too much or too little risk in your investments. Stay on track by correcting your allocation so that your portfolio is geared to suit your needs and risk profile.

Not Understanding Your Risk Profile
An investor who has a natural tendency to take risks because of his psychological imprint may have a high risk tolerance. But if you consider his financial standing as well as personal circumstances (e.g. high debts, no emergency savings), his risk capacity is actually limited. Investors should not confuse between the two and invest according to their actual risk capacity. 

Putting off investing
Some investors tell themselves that they cannot invest because they “do not have enough money” or “do not know how to begin”. The truth is anyone can invest as long as they have a plan. You can start with a small amount in Unit Trust Funds and Private Retirement Scheme (PRS) by having a minimum investment amount of just RM100. Starting early will give you the time to reap the power of compounding. 
Disclaimer
This article has been prepared by Affin Hwang Asset Management Berhad (hereinafter referred to as “Affin Hwang AM”) specific for its use, a specific target audience, and for discussion purposes only. All information contained within this presentation belongs to Affin Hwang AM and may not be copied, distributed or otherwise disseminated in whole or in part without written consent of Affin Hwang AM.

The information contained in this presentation may include, but is not limited to opinions, analysis, forecasts, projections and expectations (collectively referred to as “Opinions”). Such information has been obtained from various sources including those in the public domain, are merely expressions of belief. Although this presentation has been prepared on the basis of information and/or Opinions that are believed to be correct at the time the presentation was prepared, Affin Hwang AM makes no expressed or implied warranty as to the accuracy and completeness of any such information and/or Opinions.

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TENG CHEE WAI

Managing Director
Teng Chee Wai is the founder of Affin Hwang Asset Management Berhad (Affin Hwang AM). Over the past decade, he has built the Company to be the fastest growing and only independent investment management house in Malaysia’s top three, with an excess of RM47 billion in assets under management as at 31 December 2018.​

​In his capacity as Managing Director / Executive Director, Teng manages the overall business and strategic direction as well as the management of the investment team. His hands-on approach sees him actively involved in investments, product development and marketing. Teng’s critical leadership and regular participation in reviewing and assessing strategies and performance has been pivotal in allowing the Company to successfully navigate the economically turbulent decade.

Teng’s investment management experience spans more than 20 years, and his key area of expertise is in managing absolute return mandates for insurance assets and investment-linked funds in both Singapore and Malaysia. Prior to his current appointments, he was the Assistant General Manager (Investment) of Overseas Assurance Corporation (OAC) and was responsible for the investment function of the Group Overseas Assurance Corporation Ltd.​

​Teng began his career in the financial industry as an Investment Manager with NTUC Income, Singapore. He is a Bachelor of Science graduate from the National University of Singapore and has a Post-Graduate Diploma in Actuarial Studies from City University in London.
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