According to Patsy Khoo, two broad categories of investors prevail in the heady world of financial investing – active investors and everybody else. Active investors take on a more proactive role, constantly and closely monitoring financial markets while investing a sizeable amount of time and effort towards maximising their investments. The rest, on the other hand, fall into the majority of the investment population. Often hailing from industries other than the financial arena, this group of investors often lack the time and resources needed to fully grow and develop their hard-earned investment portfolios over a sustained period of time. Identify the category of investor you fall under and read on.

Patsy relates a recent experience with one of her clients whose decision to actively manage his own investments ended up adversely affecting the performance of his investments. And his life.

“After the recent market downturn, my client revealed that handling his own investing during [the pandemic] period had led to issues such as insomnia because he was constantly worried about his investments. He knew he could not sustain this level of stress for long especially with his plans to start a family soon. He then decided to outsource his investments to me.”

After consulting with Patsy, who diligently assessed her client’s needs and risk profile, a realistic and reachable financial goal was mapped out for him. Patsy carefully worked out a comfortable investment budget and timeline that would realistically meet his financial objectives. 3 months since he handed over his portfolio to Patsy’s care, her client has a clear strategy for investment growth – a winning decision that has yielded positively in terms of portfolio performance and, most importantly, one that has given her client back his restful nights’ sleep.

Patsy says many new investors have expectations that are unrealistic, “People cannot plan to own a house in two years’ time by starting to invest today and expect to be able to start funding their down payment two years down the road. This is almost akin to gambling – you throw the dice and you pray that it gives you the results you want.”

Proper investment strategies need to be developed for different needs and risk profiles, and it is crucial to set everybody’s expectations right when it comes to portfolio returns.

Today, patience has become a virtue that is sorely lacking in most of us – thanks in no small part to the instant gratification culture we have all become accustomed to. Many investors get impatient when it comes to realising their portfolio gains. Clearly, track records indicate that timing and patience remain key factors in achieving investment success. According to many industry professionals like Patsy, most laypeople still hold on to misdirected notions about financial investments, particularly in relation to the time needed for such investments to yield results.

“The key to making your investments work for you is patience,” suggests Patsy. “The best returns are yielded over a longer period of time, that’s why Warren Buffett says that the best horizon for investments is forever,” she adds.

In Patsy’s opinion, the best time to start investing is actually yesterday. Even without an immediate goal, it is always good to start investing because by the time an individual needs the money, he or she will be pleasantly surprised with the positive effects of compounding interest. If there is a goal or milestone to be reached, work out the best route to reach that financial goal with a financial consultant. Ultimately, having a sound investment strategy with reasonable goals that can accommodate changing life stage needs will be advantageous, especially in the long run.