The way you approach your vote is pretty similar to the way to should go about choosing your investments. You need to be careful since in both cases you are stuck with the outcome of your decision for a long while once you make your mark.
Mange your expectations
Get to understand as much as possible what the reasonable outcome will be. Understanding HOW your investment will deliver returns over the period is more important than what it will be. This will avoid being disillusioned. Understanding the capability of your party you vote for to deliver its promise also takes a realistic evaluation. Focussing on HOW things will be achieved is as important than what is promised. In both cases don’t be lulled by promises of unrealistic returns.
Past performance does not predict future
Resting on the laurels of the past does not guarantee much into the future. Circumstances change as well as economies and these have a direct bearing on how investments and governments will perform into the future. To get high returns on your investments against the backdrop of a long sustained weak economy into the future is not that likely. So past stellar performances are not probable in the foreseeable future. Similarly, does your vote consider the parties’ ability to achieve economic success through trying times both locally and globally which will deliver sustained improvement to everyone?
Don’t become endeared to your assets
There comes a time to sell or switch your funds to keep up with the times. Right now is not the time to be aggressive with your investments as there is a great risk of losing capital. So a cautious approach will be more appropriate than an aggressive one. You should use your head not your heart in taking a practical approach rather than one which feels good. Similarly, exercising your vote should be done with reason and logic rather than passion and feeling. If you want things to change you need to do something different.
It all boils down to making sound choices with realistic expectations. It is a responsibility placed on all of us to vote and to invest. Both have a direct bearing on our financial well being into the future.
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Read more from Paul Roelofse at www.investforlife.co.za
This article first appeared on 702 : Voting and investing have similar approaches…