What may be seen as a normal investment path could lead investors into high risk “gambles”, according to Aviate Group managing director Neil Smoli.
With the ‘typical’ investment path being that of savings, followed by an initial investment and then enjoyment of first up result, said Mr Smoli, a critical juncture then follows that could lead the properties into a ‘bust’.
“Then the investor faces a critical juncture, as the success of the initial investment can naturally lead to an increased appetite for investing, supported by a greater availability of means to invest.
“This is an important stage in the investor’s path and the most successful investors are those that can recognise and effectively navigate this stage,” he said.
The investor should be considering each next step in advance of taking it, “as resting on the laurels of one successful investment is unlikely to satisfy the objectives the investor had at the outset.
As a result, security and risk mitigation should be the highest of concerns.
“There are pitfalls evident in the natural path most investors take and only through a carefully developed strategy that is strictly adhered to can these risks be mitigated.
“Making security a top priority at all times is essential,” Mr Smoli said.
He advised that investors make their first purchase one that is ‘low-risk’ and then shift their focus to responsibly managing this portfolio until re-evaluating.
“For investors who place a high value on their security, at no point should speculation be the next course of action in their investment journey.
“Get rich quick investments and speculative schemes have their appeal for investors with the ability to withstand a loss," he said.
Investors should remember that often low-risk comes with moderate returns as a result, and both should be weighed up appropriately.