Originally published on Patch.com
Based out of Baton Rouge, J.D. Perry oversees Moss Point Financial, a specialty investment management firm with a groundbreaking strategy known as the Moss Point Approach. However, you don’t need to revolutionize your portfolio overnight to become a better investor. Mr. Perry stresses that anyone who is considering investing money should first and foremost make an effort to become more knowledgeable on the subject.
While the learning curve can be steep and unforgiving, J.D Perry’s 20 years of experience in financial analysis, corporate cash management, asset management, environmental mitigation banking, and real estate have allowed him to breakdown an investment improvement process into simple steps that can improve your chances of success.
As J.D. Perry’s successful career has proven, the best route to making better investments is through study and experience so with a little patience and determination anybody can create a winning portfolio.
Take the time to define your investment goals clearly. Outline what you want to achieve and the timescale you want to do it in. If you know why you're investing, your goals should be clear. Once you have a list of objectives, you can start to tailor your investments to match your goals.
Your objectives will act as a frame of reference to which you can continuously refer to keep your investments consistent and on target. Streamlining your investments to match your goals better will create a more effective and concise portfolio which is easier to manage and more likely to produce results.
In investment, as in life, there are a lot of variables and things can change quickly. While it's essential to have a clear set of goals, it's also necessary to adapt your plan to your evolving circumstances. Review your investments regularly and alter your strategy if it's not working as you would like.
If your circumstances change, your portfolio may no longer be the most appropriate one for you, so adjust it if necessary. While it's essential to be flexible, you must also give your original plans time to work so only act when you feel it's right to do so.
3. Risk tolerance
You need to establish your level of risk tolerance. In basic terms, this means you need to know how much money you'd be comfortable losing in a worst-case scenario. Calculate your risk tolerance level by assessing your financial circumstances, such as your income, savings, assets, and spending.
Take into consideration all of your tangible assets and all of your potential future earnings and compare them to your outgoings to get a rough idea of how much you could objectively handle losing. You then need to make a personal judgment on how much of that figure you would be comfortable risking. Never invest more than your level of tolerance.
The benefits of diversifying your investments have been well documented. If the majority of your portfolio is in one industry, then you risk losing a lot of money if that sector takes a hit. By investing in different, disparate areas, you protect yourself from significant harm through the process of compartmentalization.
It's best to invest in opportunities that are as separate from one another as possible. Some sectors, like tourism and transport, are inherently connected, so a financial downturn in one may, in turn, impact the other. Invest in a wide range of opportunities to give yourself the best protection from disruptive influences or events.
Establishing a level of emotional distance from your investments is essential. Try to make your decisions from as objective a viewpoint as possible to reduce the prospect of errors that often accompanies emotional attachment. Listen to numbers before instinct and trust your calculations.
Automate the process as much as you can and seek advice from a range of people to get more balanced and unbiased opinions. Refer to your stated goals and your investment strategy to keep your decision-making consistent. Investors that are impassive and detached from their investments tend to make smarter decisions.
An investor that takes these tips on board will give themselves a higher chance of making money through skilled financial decisions. The landscape of the investment world is ever-changing, and only those who are driven yet adaptable will see a consistent return on their investments.
About J.D. Perry:
J.D. Perry of Baton Rouge, LA is a results-driven leader with over 20 years of experience in financial analysis, corporate cash management, asset management, environmental mitigation banking, and real estate. Mr. Perry focuses on minimizing risks and building relationships to drive continuous growth and profitability.