Investing is one of the most important decisions that individuals and businesses make. It can have a significant impact on their financial futures and ultimately determine whether they achieve their goals or not.
To make the right investments, you need the correct information. As David Rojas, Founder and CEO of Blue Castle Ventures LTD, said, “It’s kind of a big mistake to get a recommendation from someone who is not qualified.” With so much at stake, it is essential to approach investing with a clear and proper strategy. For someone who has graced the grounds of Harvard Business School and created several investment entities, it’s safe to take advice from David on the importance of strategizing for investments.
One of the primary reasons to strategize for investments is to maximize returns. When you craft a strategy for investment, you get to create a style that works for you. David Rojas, for instance, is proud of being a short-term investor.
He says, “It’s quite interesting that big firms are starting to do what I have been doing since 2016, which is not planning long-term investment. Now, they make a short-term investment, which is what I do. I do momentum trading, identify some parameters or features that some stocks show, and take advantage of them. So let’s say big volume; people focus more on percent gainers, and I focus more on volume, and these allow me to get in and out with bigger positions and faster….”
Every investor wants to see their investments grow and generate significant returns. However, with a clear strategy in place, it can be easier to achieve these goals.
A well-designed investment strategy will consider various factors, such as risk tolerance, investment goals, and market conditions. David says, “if you are not every day, sitting there listening to the market, you are not going to make a profit from it.”
Another critical reason to strategize for investments is to mitigate risk. With investment, volatility is the order of the day. As David Rojas rightly points out, “whenever there is a big announcement, or something is going on – like war, that – the market – changes. Right? That changes every day, or on the same day, you can see big spikes. You know, it’s crazy – the amount of volatility.”
All investments come with a certain level of risk, which is impossible to eliminate. However, by developing a clear strategy, investors can minimize risk exposure and protect their investments.
One effective strategy for mitigating risk is diversification. Investors can reduce their overall risk exposure by spreading investments across various asset classes and sectors. This can help protect them against losses in any area and ensure their portfolio remains balanced and stable.
Another strategy for mitigating risk is to be patient and avoid making impulsive decisions. For instance, David Rojas has a habit of taking notes of positive moves and leaving some time before making investment decisions. “I get up every day at like 4:30 am. I first check the market to see what type of kind is the biggest gainer of the morning. That gives me some idea of how good they will look. So after I check the market, I’ll just go to the gym. I work out and come back. At about 7 am, I look at the market again and see if those first gainers I had in the morning were still there. And then I can determine what sector is moving.”
Having a healthy investment habit can help you prevent unnecessary losses.
Strategizing for investments is critical for anyone who wants to maximize returns, mitigate risk, and achieve their financial goals. By developing a clear plan that considers risk tolerance, investment goals, and market conditions, investors can make informed decisions and stay focused on their objectives.