Investment Tips
10/04/2016
When is the right time to invest?

Investors often worry about the timing of their initial security purchases. Whenever you first invest, time is on your side. Over the long-term, the compounding returns of a well-chosen investment will add up, no matter when you first bought your investment. This is particularly true when buying equities or shares.

When will you need the money?

Rather than thinking about when it is time to purchase a security, think about how long you are planning to keep the money invested. Different investments offer varying degrees of risk and return, and each is best suited for a different investing time frame.

In general, bonds offer smaller, more dependable returns for investors with shorter time frames, whilst shares and funds offer better returns for investors with longer time frames.

The longer the time frame you have, the greater the risk you can tolerate, since you'll have more time to wait out periods of bad returns. Stocks or mutual funds investing in equities are a very attractive option for long-term goals like retirement.

However, if you need the money within less than 5 years, you will want to avoid individual stocks and stock-centric mutual funds. Furthermore, if you need the money within the next 3 years, you might want to avoid bond mutual funds, whose value is likely to drop if interest rates increase, and either purchase individual bonds with less than 3 years duration, or invest your money in fixed term deposit accounts, such as those offered by Mediterranean Bank. Both options will generate a regular income while the capital invested will be returned at maturity of the bond or of the deposit.

When to sell?

Once you have decided what to buy, and when to buy it, you'll next need to decide when to cash out. Since bonds essentially sell themselves when they mature (if kept till maturity), this question primarily applies to stocks or funds investing in equities (or shares).

Some investors believe they can "time" the market, accurately predicting when it will rise and fall. Unfortunately, investing is not that straightforward. When the economy begins to hurt corporate earnings growth, and companies start to struggle, these investors will sell all the stocks only to buy them all back when they believe the market is preparing to rise.

Many funds investors are quick to withdraw their money when returns are no longer profitable. But several academic studies have proven that investors who switch from one fund to the other, chasing performance, tend to do vastly worse than those who stay put. Be prepared to stick with a fund through good and bad times. In an actively managed fund, such as those in the Model Portfolios offered by Mediterranean Bank, the money is entrusted to a professional fund manager. These funds are recommended to us by Morningstar, and are rated as being the best in their category according to their fund manager tenure, expense ratio, risk and return, overall performance and prospects for the future.

Don't get influenced by one particular market

The media pays particular attention to Wall Street, but it tends to focus entirely on one particular index, assuming that it reflects the entire market. Index goes up? We are told the market is "bullish”. Index goes down? Instead we are told the "bearish" market is here. Index yo-yos back and forth? The market is described as "volatile".

Some investors study the ups and downs of market graphs to gauge whether the market will go higher. Whatever the market's doing at the moment, a buy-and-hold approach to investing is the best way to earn reliable long-term returns.

Review

Of course, you cannot just load your portfolio with a few stocks or funds and forget all about them. Like house plants, investments need regular care and attention to flourish. Thus, you need to check on your investments regularly. Set aside time to review your portfolio, at least once every three months, especially where you have invested in equities. When you have invested in mutual funds check the Net Asset Value (NAV) of the fund. The NAV is the price of each share of a mutual fund, calculated by dividing the total value of all the fund’s holding minus liabilities, by the number of outstanding shares.

To conclude, most seasoned investment professionals will tell you that it is almost impossible to time the market. They will also tell you that time in the market is much more valuable than attempting to time the market. Markets move up and down but the historic trend is up, so staying true to a long-term investment strategy delivers far higher returns than jumping in and out of the market.

 

This article is intended as a guide to provide readers with useful information and to improve their knowledge of investments, though it does not constitute and should not be treated as investment advice. The price of all investments can go up as well as down, and past performance is not indicative of future performance.

 


 

Meta hu l-aħjar żmien biex tinvesti?

Ħafna drabi l-investituri jinkwetaw fuq meta hu l-aħjar żmien li fih jagħmlu l-ewwel investimenti tagħhom. Tinvesti meta tinvesti, iż-żmien hu dejjem favurik. Fuq medda ta’ żmien twil, id-dħul akkumulat minn investiment li jkun intgħażel tajjeb, se jiżdied, ikun xi jkun iż-żmien li fih tkun għamilt l-ewwel investiment tiegħek. Dan jiġri l-aktar fil-każ tax-xiri ta’ ekwiti jew ishma.

Meta jkollok bżonn il-flus?

Aktar milli taħseb fuq meta għandek tixtri xi assi jew investiment, aħseb fuq kemm beħsiebek iżżomm flusek investiti fis-suq. Investimenti differenti joffru gradi varji ta’ riskji u dħul. Kull prodott ta’ investiment għandu l-aktar karatteristiċi sodi tiegħu relatati maż-żmien tal-istess investiment.

B’mod ġenerali, il-bonds joffru dħul medju jew baxx pero dħul aktar affidabbli (dependable bl-Ingliż) għal dawk li jippreferu jinvestu għal perjodi qosra ta’ żmien, waqt li ishma u funds joffru dħul aħjar għal dawk li lesti jinvestu għal tul ta’ żmien.

Aktar ma tinvesti fit-tul, aktar taffordja tissogra, għax tkun tista’ tistenna aktar biex tevita dawk il-perjodi meta d-dħul ma jkunx daqstant tajjeb. L-istocks jew il-mutual funds li jinvestu fl-ekwiti huma għażla attraenti ħafna għal għanijiet ta’ investiment fit-tul, bħal ma hu l-irtirar mix-xogħol.

Madankollu, jekk ikollok bżonn il-flus f’inqas minn 5 snin, ikollok tevita l-istocks f’kumpaniji individwali u l-istock-centric mutual funds (jiġifieri dawk il-funds bbażati fuq l-istocks jew ishma). Jekk tkun trid il-flus f’inqas minn tliet snin, evita wkoll il-bond mutual funds għax dawn jistgħu jinżlu fil-valur jekk jiżdiedu r-rati tal-imgħax.

Meta neliminaw dawn, ftit li xejn jibqgħalna għażla: nistgħu jew nixtru bonds individwali li jkunu se jagħlqu f’inqas minn tliet snin, inkella nqiegħdu flusna f’kontijiet bhal ‘fixed term deposit accounts’, bħal dawk li joffri Mediterranean Bank. Dawn iż-żewġ għażliet jiġġeneraw id-dħul u jiggarantixxu qligħ fuq l-ammont investit. Aktar ma tkun trid tiġbed flusek lura malajr, inqas tista’ taffordja li titlef.

Meta għandek tbigħ l-investiment?

Wara li tkun iddeċidejt x’se tixtri, u meta se tixtri l-investiment, ikun jonqsok tiddeċiedi meta se tbigħ l-investiment tiegħek. Peress li l-bonds normalment ibigħu lilhom innifishom meta jimmaturaw – jekk jinżammu sakemm jagħlqu, dil-mistoqsija tapplika, qabelxejn, għall-istocks jew il-funds li jinvestu fl-ekwitajiet (jew ishma).

Xi investituri jemmnu li jistgħu "ibassru" x’se jiġri fis-suq, b’mod preċiż, meta jkun se jitla’ jew jinżel. Sfortunatament, mhuwiex daqshekk faċli, daqs kemm wieħed jaħseb! Meta l-ekonomija tibda tolqot ħażin it-tkabbir fid-dħul ta’ kumpaniji u dawn il-kumpaniji jibdew ibatu, dawn l-investituri jidhrilhom li għandhom ibigħu l-ishma imbagħad jixtru lura dawn l-istess assi meta s-suq jerġa jibda tiela’.

Ħafna investituri tal-mutual funds ikunu pronti biex jiġbdu flushom meta d-dħul ma jibqax daqstant tajjeb. Imma diversi studji akkademiċi taw prova li l-investituri li jaqilbu minn fund għal ieħor, skont kif ikunu sejrin, għandhom tendenza li jmorru agħar minn dawk l-investituri li ma jagħmlux hekk u jissaportu aktar. Irridu nkunu lesti li nżommu fund u nibqgħu bih kemm fit-tajjeb kif ukoll fil-ħażin. F’actively managed funds, bħal dawk f’ Model Portfolios, offruti minn Mediterranean Bank, il-flus jiġu fdati f’idejn manager professjonali. Dawn it-tipi ta’ funds huma rrakkomandati lilna minn Morningstar, u meqjusa bħala l-aqwa fil-kategorija tagħhom meta tqis il-perjodu tal-investiment, l-ispiża involuta (jew l-expense ratio), is-sogru u l-qligħ, il-prestazzjoni u r-riżultati miksuba b’mod ġenerali, u l-prospetti tagħhom għall-futur.

Tinfluwenzax ruħek minn xi suq partikolari

Ħafna drabi l-mezzi tax-xandir jixħtu attenzjoni partikolari fuq Wall Street fl-Istati Uniti – imma hemm ix-xejra li dawn jiffokaw fuq indiċi partikolari wieħed, u jassumu li b’hekk ikunu qed jirriflettu s-suq kollu. L-indiċi jitla’? Spiss jgħidulna li s-suq qiegħed ‘bullish’ jiġifieri tielgħa. U jekk l-indiċi jinżel? Spiss jgħidulna li s-suq huwa "bearish" jiġifieri l-prezzijiet tas-suq niżlin. L-indiċi jitla’ u jinżel? Jiddeskrivulna s-suq bħala "volatili" jew "instabbli". U nibqgħu sejrin hekk.

Xi investituri jistudjaw il-graphs bix-xejriet ta’ meta s-suq jitla’ u jinżel biex jippruvaw ibassru jekk is-suq hux se jitla’ aktar. Lil hinn minn dak li jkun qed jagħmel is-suq fil-mument, l-aħjar metodu hu li nixtru u nżommu l-investiment fit-tul biex eventwalment tassew ikollna qligħ tajjeb.

Importanti nsegwu l-investimenti tagħna

Naturalment, ma nistgħux nimlew il-portafoll tagħna bi ftit stocks jew funds u ninsewhom. Bħal xitla fid-dar, l-investimenti jeħtieġu l-attenzjoni regolari tagħna biex jiffjorixxu. Għalhekk, irridu niċċekkjaw l-investimenti tagħna regolarment. Irridu niddedikaw il-ħin biex insegwu l-portafoll ta’ investimenti tagħna, mill-inqas darba kull tliet xhur, speċjalment jekk inkunu investejna fl-ishma ndividwali. Meta ninvestu fi mutual funds irridu niċċekkjaw l-Valur Nett tal-Assi tal-fund jew kif inhu magħruf in- Net Asset Value (NAV) tal-fund. Dan hu l-prezz ta’ kull sehem fi mutual fund, maħdum billi naqbdu l-valur totali tal-fund li minnu jrid jitnaqqas l-ammont dovuti lil terzi u niddividuh bin-numru ta’ ishma li fih il-fund.

Biex nagħlqu, ħafna professjonisti tal-investimenti jgħidulek li hu kważi impossibbli li tbassar iż-żmien meta għandek tinvesti. Jgħidulek ukoll li fis-suq it-tul taż-żmien li fih tinvesti huwa ħafna aktar importanti u ta’ valur milli toqgħod tipprova tara meta għandek tidħol u toħroġ fil- u mill-investimenti tiegħek. Is-swieq jitilgħu u jinżlu imma x-xejra storika hija ’l fuq – għalhekk, jekk ikollok strateġija ta’ investiment ta’ żmien fit-tul tagħmel ferm aktar qligħ minn meta toqgħod dieħel u ħiereġ ’il ġewwa u ’l barra mis-suq.

 

Dan l-artiklu jgħati gwida b’informazzjoni utli kif inżidu l-għarfien tagħna dwar l-investimenti, għalkemm ma jikkostitwixxix u mghandhux jiġi ttrattat bħala parir dwar l-investimenti. Il-valur ta’ l-investimenti jista’ jitla’ jew jinżel u l-passat mhux garanzija tal-futur.

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