Chris Tate says taking the time to sit, think, evaluate and establish a plan is the key to investment success.
Chris is an inveterate thinker, best-selling author and investment trading veteran who understands what it takes to profit from every market condition.
He told Bushy Martin on the Get Invested podcast that the COVID-19 crash should not cause any rash reactions and believes the share markets are systems that investors should learn to read and follow.
“I believe that markets are exceptionally generous. They will tell me everything I need to know and then they will present me with infinite opportunities to enact what they’ve told me,” Chris said.
“We’ve had collapses in markets forever. And so we have a history guide in that … we have ideas and strategies on how to deal with it, and the bottom line is that the market will tell you when to buy.
“What people don’t realise is that money is not made on the turn. That’s where people get churned up. The money is made a year or two post, so there is plenty of time … one thing people forget is that the market will be there tomorrow, and the next day, and the day after.
“There is this desperate need to react rather than think. So just take a deep breath, sit down and say, ‘okay, what will convince me that now is a good time?’ And if [you’re] investing for the long term, well, it’s not going to be a good thing to do now. It’ll be a good thing to do for tomorrow, next week, next month, next year, because that’s just the way these things work.”
For those looking to build their wealth, Chris said you need to match your approach based on your strengths, weaknesses and what you’re capable of doing. He also talked about the importance of acknowledging that investments are a long-term game, and as such you should be establishing a plan and breaking it down into small steps.
“[People have] this desire to be successful now without actually sitting there and going, ‘here’s my plan for tomorrow, next week, next month, next year, next decade’,” he said.
“Start with the end in mind. What version of you do you want to see in 5, 10 or 20 years time? Now begin to break that down into little bits and break down the steps and the paths. What do I need to learn? Where do I need to position myself?
“Everything has a plan. And without the plan, it all just goes pear shaped because you simply don’t know what you’re doing.”
Chris said that many investors can become too emotionally involved or overthink the uncertainty of a situation. However, he believes uncertainty in investments should be embraced, as it opens the window for opportunity.
“The problem is people get in the way of themselves. ‘I can’t do that because I think, I feel, I believe, I’ve heard’ – push that all to one side and do what the system tells you to do. And one of the difficulties people have with markets is that they are uncertain. But this uncertainty gives you the opportunity to profit,” Chris said.
“When I ask people how much their house is worth and they give a figure, I say well no, it’s not. Your house is actually worth zero at this moment in time because nobody’s offered you any money for it.
“So, every investment property in the world, to my mind, is worth zero. And people freak out when they start to think about that because it introduces an uncertainty that property investments do not have.
“But all investing has uncertainty, and it has to have uncertainty because if there’s no uncertainty, there’s no risk. And if there’s no risk, there’s no profit.”
Chris is open about the fact that his successes haven’t come without his fair share of mistakes. However, he highlighted that evaluating your behaviour and bad decisions is an important part of the process.
“You’ve actually got to sit down and look at yourself, and you’ve actually got to be honest with regards to the mistakes you make and the poor decisions you do and try and work out why … you’ve got to understand why you do things. ‘Why did I behave in that way? Why did I react that way?'” he explained.
Especially during times of crisis and global events like COVID-19, Chris said investors need to be aware of their reactions and also the impact that news sources can have upon their decisions.
“I think what happens with people when they come to the investment sphere, when people jump at shadows a lot like they’re doing now with the unfortunate events of COVID 19, is they’re addicted to narrative,” he said.
“The more impulsive and emotive the story, the more of an impact it has upon us. And one of the hardest things I find to convince people of is that if you listen to the news and you listen to the business news, you will never be successful in any sphere at all.”
Listen to the full interview here.
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