About 10 minutes before I started to write this blog I looked up an update on the number of shares that I monitor regularly and it reminded me about a client that I advised to invest in one of the shares on the list because at the time he had some spare cash. The date was 20.06.11 (13 months ago) when this particular share was valued at $49.52 and his $260,000 at the time would have purchased him 5,250 shares.
Yesterday’s share price was $55.90, which would have made his investment valued at $293,475 a growth of $33,475 and this does not take into account the fact that the client along the 13 months would have picked up couple of dividends valued approx. $18,000. The overall result would have been 19.8%.
What an excellent result that would have been for him. But of course like most people investing $260,000 in the sharemarket is not an easy decision and I can understand why he would be reluctant because the sharemarket can be a cruel friend.
What is interesting to me about case me is that I can use it as a learning tool for future to educate clients to understand and follow some simple rules of investing:
1. Investing is not a SECRET. It is a by-product of knowledge and experience.
2. Buy low and sell high.
3. Don’t get caught up with people telling you the good result stories. This is why people get “sucked in” with investments because they follow good news. Just imagine if this story is told by a work mate in the lunch room. I have no doubt someone listening to it would simply find out which share and buy into it, without thinking.
4. Investors need to be patient with investments. There is no such thing as quick money.
If you have specific tax and/or investment questions, feel free to contact me.
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