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To be a successful investor takes discipline, says Lettie Mzwinila, business development manager at Allan Gray.
Her advice is to learn to ignore so-called investment noise - or, as she puts it, information that is not useful to your long-term goals, including information that distracts you from those goals.
Mzwinila offers five steps to help you determine which investment tips are useful and which you should ignore.
Establish the facts
Before investing, carefully investigate the investment to determine whether it is appropriate for your needs.
For example, if you are investing in a unit trust, study the fact sheet to see whether its objectives and time frames align with yours.
Explore implications
Fully consider the implications of any investment decision you plan to take, suggests Mzwinila.
Plot the worst-case scenario
What if you followed the wrong advice or invest at the wrong time?
If you buy when a share price is high, you could be setting yourself up for poor returns, or worse, losing money.
Mzwinila suggests you consider the worst-case scenario. This will help you make a more considered investment decision.
Don't chop and change
"You are likely to receive a lot of advice from people around you. Reacting to even a portion of this is likely to lead to poorer investment outcomes," says Mzwinila.
"It is much better to be clear about your investment plan and stick to it."
Seek good independent advice
Many investors are reluctant to pay for professional advice, but it can be more costly to pursue free tips from someone who is not qualified to give financial advice, according to Mzwinila.
"A good independent financial adviser can help you select an investment that is right for your circumstances, and help you manage your behaviour while you are invested to improve your investment outcomes," says Mzwinila.
"A key consideration in selecting an adviser is trust. In this instance, a suitable starting point in looking for one is to ask for a recommendation from someone whose judgement you value."
