• Loading stock data...

Resources

< Articles

The importance of discipline when it comes to investing money

Reading time: 00:02:30 min

The investment universe has multiple edges. For those people who want to make their money grow for the first time it may be mysterious and a little bit confusing. Likewise, this may look quite attractive for those who may often have invested their money, know how the procedure works and are now seeking to strengthen their assets, thus increasing their risk and investment period.

There are too many factors that must be taken into consideration when investing since the economy is not a steady entity, but a changing one which follows boom and bust cycles. As a rule, these cycles are experienced when getting a long term portfolio.

Therefore, it is important to be disciplined when investing. Always bearing in mind the basic principle of discipline as the ability to do things in an orderly and systematic way. If this concept is applied to the investment universe, we can define it as the adequate decision-making based on a strategy generated by the objectives proposed at the time of investing.

The goals, when it comes to investing, are the grounds to keep an accurate financial discipline. When investments are made on a long term basis, the goals are not focused on just making money, but also in strengthening one's assets, and these projects are often planned from 10 years onwards.

The previous statement goes hand in hand with Asset Allocation, an additional key factor to be considered when you are looking for long term investments, as you can assess the relationship between risk and performance. Similarly, the strategy to follow when selecting the distribution of stocks, bonds and cash in your portfolio is responsible for over 90% of the variability in the yields1.

But It is not only about respecting the predetermined investment periods, but about taking into account the strategy applied as it is another key element to attain your financial objectives. Poor decisions on asset allocation may give rise to different yields regarding rates. 

Every strategy must be appropriate to the customer's risk profile. To assess your investor's risk profile, you have to evaluate different factors such as time horizon, liquidity needs, and risk tolerance, amongst others. 

Should you want to figure out what your investor’s profile is, understand what investment strategy is right for you, and what are the available assets where you can invest based on your objectives; hence, your next step is to find a team of experienced investment advisors. 

Banorte Securities has highly qualified financial advisors who will help you have a simple and enjoyable process.  

Our experienced advisory team will help you find a suitable globally diversified investment strategy designed to meet your specific long and short term financial requirements, risk tolerance and liquidity needs. For more information, click HERE.

Sources:

https://www.eleconomista.com.mx/opinion/Por-que-es-importante-mantener-disciplina-en-tus-inversiones-20200923-0093.html

https://www.coursera.org/learn/portafolios-inversiones-en-mercado-de-capitales

https://concept.de/disciplina-2/

1 Source: Brinson, Hood and Beebower-Financial Analysts Journal / Jan-Feb 1995; NorgesBank -A Review of NorgesBank's Active Management of the Government Pension Fund Global / Jan-2018.

https://media.gbm.com/inversion/la-disciplina-al-invertir/#:~:text=En%20tu%20inversi% C3% B3n%20es% 20lo, reasons% 20no% 20 justifiable%20o%20dudas.

More From Banorte

Are you thinking of investing? Please read the following article before moving forward.

Published: January 19, 2022

Reading time: 00:02:15 Investing was considered a far-off idea by many people until a few years ago. However, the financial world has suffered great and important changes upon the arrival and development of technology, resulting in different benefits, such as the possibility to make capital investments through digital platforms. Digital investment platforms are applications or...

View More

Expert Insight: The Impact of the Historic Financial Stimulus Package on U.S. Interest Rates

Published: March 30, 2021

Historically, the U.S. Treasury yield curve tends to be the first mover of all domestic interest rates and an influential factor in setting global rates. Over several months leading up to January 2021, the U.S. Treasury yield trended slightly due to vaccine progress and the expectation of increased stimulus under a Biden administration. They then spiked sharply in February and March as it became clear that the administration would successfully pass one of the largest fiscal stimulus packages in modern history.

View More

Ready To Unlock A Powerful Financial Future?

  • This field is for validation purposes and should be left unchanged.