Plenty of rich folk around the world and many seek investment discipline and guidance
By Dian Vujovich
The good thing about having loads of money is that you’ve got loads of money. Beyond that the differences between how you invest, why you invest, your investment objectives and points of view are as varied as the size of your portfolio.
In Barclay Wealth’s 13th annual Risk and Rules: the Role of Control in Financial Decision Making Report, turns out America’s ultra rich are pretty satisfied with their financial situations ranking 5th out of 20.
Of the 20 countries where investors surveyed for this report lived, the No.1 slot for most satisfied with their financial situation went to investors in Switzerland. Next in line were those who lived in Qatar, then Saudi, Singapore and the U.S.
While wealthy Americans may be pretty satisfied with their financial circumstances they, like others interviewed around the globe, realize that their emotions and self-discipline both play a role in their investment decisions.
Almost one-half of the 2000 individuals polled said they wanted more self-control in their financial behavior. That said, where they lived and how they got their wealth played a part in the amount of self-discipline they were seeking: Women, entrepreneurs and those who inherited their money wanted more investment discipline than investors who had earned their wealth. Investors in Taiwan and Hong Kong wanted more financial discipline than investors living in Spain, Australia and the US.
As far as trading goes, men see it as having a more positive impact on their wealth than women. But, guys also tend to believe that they trade too much.
If there is one tidbit of investment advice from this report that we can all put to use today it’s this: Always consider the big picture.
From the report: “We are all subject to what psychologists call “narrow framing”—we consider decisions in isolation, without looking at the big picture. We therefore tend to focus on investments decisions one by one, without considering the impact (each has) on our overall portfolio.”
Not keeping an eye on that big financial picture—your personal one and that of the market place—can mean making lots of buy-and-sell decisions that result in higher trading costs. Worse yet, decisions that are more likely to be emotionally driven rather than ones that are well thought out and relate to your overall investment strategy.
Bottom line: See. Think. Act.
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