by Stienemarié Bonsma-Potgieter, CFP® – Financial Planner

As we kick off a new year and reflect on the year that passed, it is normal to try predicting what the year will hold and how to adapt your investments accordingly. We should tread lightly when making predictions as they can cost us dearly when we get our predictions wrong. What we should do instead is consider the investment basics that will not change, no matter what the market is doing.

Growth Assets over Safe Bets: Over the long-term (10+ years), choosing investments that have the potential to grow higher than inflation tends to pay off better than conservative assets like cash. While it’s tempting to stick to low-risk options, finding a middle ground that fits your comfort level and goals is key.

Taxes: We can’t avoid taxes, but we can manage them. Being tax efficient is another key to higher returns. Look into tax-friendly investments, take advantage of available deductions and investigate strategies to minimise the tax impact. It’s a simple way to keep more of your gains.

Market Cycles are Inevitable: Financial markets have their ups and downs; that’s just the way it goes. Trying to predict short-term winners is tough, even for experts. Instead, go for a mix of investments that can handle the market’s highs and lows. This way, you can benefit from the overall upward trend over time without stressing about short-term drops.

Compound interest: The longer your money stays invested, the more it will grow. It’s like planting a seed and giving it time to become a big tree. Patience is key. By taking a long-term approach, you can ride out the market’s ups and downs and let your money grow steadily.

Let’s shift our focus from trying to predict the future to what we can control. Adding growth assets like shares, being tax-wise, riding out market waves and maximising our investment time horizons are timeless principles that work.

As we start a new year, let these straightforward ideas guide your money decisions. Success in investing isn’t about timing the market—it’s about time in the market. Stick to these basic rules, and you’ll build a solid financial foundation, no matter what surprises the future holds.