Income, Growth, and Risk. Choose 2.

Algoinsights Blog, Investing, Investment, Success, Wealth

Many investors should not be unfamiliar with the title of this blog article of mine.

However, when posed with this question, they want to have high income and growth at the lowest risk possible in their portfolio.

While this may sound logically to the average mind, in practice this is NOT the right way to think as a mature investor.

We are all co-related

Yes. We are all co-related. If you can start to think in this manner, your life will become more peaceful and all your investments will ge better results.

What do I mean?

Let’s take the analogy of your investment portoflio as your whole body.

Our body is so complex and yet it works 24 hours a day seamlessly without any effort on our side. All our organs work together as a whole, very much like a orchestrated symphony. All our organs know their role within our body and they work in harmony with each other to keep us in optimal health.

Our body is so smart that it can tell us what we need, when we need it, and what we have in excess of for the proper functioning of our body.

For example, our body knows we need certain amount of sugar for our body to function properly, but too much of it would cause us health problems like diabetes. Similarly, our body knows we need certain amount of salt for our body to function properly, but too much of it would cause us health problems like water retention etc.

The key word here is moderation.

But moderation is only one part of the equation. You need to know the other part of the equation to lead a balanced and optimal life – Quantity, and Timing.

What has the functioning of our body got to do with our investment  

My short answer is, “Everything.”

If you start to think of your investment like your body as I mentioned above, your investing journey from now onwards will improve for the better. You will sleep better, and enjoy your life better as a result.

If you start to think of Income, Growth, and Risk as the 3 major organs in your investment portfolio, and applying the analogy I shared above, you will come to the realization that chasing after the highest income, and growth at the lowest risks is NEVER possible.

Telling your investment advisor that you want the highest income and growth at the lowest possible risk in your portfolio is likened to telling your doctor that you would like to consume all the sugar and salt in the world and not getting any health problems at the very least. This kind of thinking is immature.

Everything is a trade-off in life

Whether you like it or not, whatever you do in life is a trade-off.

Whether you are single or married, employer or employee, male or female, you are always trading one thing for another. Trading time for money is a classic example of a typical employee that we are all familiar with.

Can you think of something that you are trading your life for? You can, can’t you?

Therefore, there should not be any difference in your investing journey. In fact, in the investment universe, trade-offs are more obvious and apparent than in our daily lives.

Sadly, most people do not see trade-offs in their personal lives, and I think this has led them to live mediocre lives.

My point is that when you start to see trade-offs in everything that you do and apply that manner of thinking to your investing journey, you are going to end up financially richer than ever before.

With your wealth, you can then inspire and educate people around you to think the same way as you do and help them increase their financial lives. This is the best way I know to lift people up to the next level. Personally, I am a strong advocate in this way of helping people around me.

If you want to have high income and growth, you need to be able to take a higher portion of risk to match your expectation and vice versa. Be reasonable with yourself and your expectations. Period.

Can I have the best of both world?

Yes, you can. Take an average.

When I say, “Take an average”, I don’t mean live an average life. We must all live our lives to the fullest. This is our God given potential.

When I say, “Take an average”, I mean take an average return in your investment portfolio. Doing so will not wrack your brains to decide what to invest in, when to invest, and how much to invest.

Taking an average returns approach in your investing journey gives you better sleep every night, and this is the best benefit I know as “an average returns” investor myself.

How can you do it?

Well, I have been asking clients of AlgoInsights to invest into ETFs, Indices, and Mutual Funds with their profits they made from trading the Forex market. Doing so will help them establish another stream of passive income for themselves.

While I do not advocate any fund or fund house in my blog article, I certainly know that the results from investing in ETFs, Indices, and Mutual Funds far outweigh investing in any individual corporate stock and with much less stress.

Like I always say to my clients, “why look for the needle in the stack? Buy the whole stack”.

Thank you for reading my blog article.

Profitable investing to you.

Victor Ang

CEO & Founder, AlgoInsights