Investing is not always a clear-cut decision. Generally speaking, Investors tend to rely on their economic sense rather than just mathematical or technical estimation.

 

Economic sense simply means careful and efficient use of resources.

 

Economic sense covers the elements of:

1. Cash Flow

The   saying that “cash is king” should be truly engrained in the mindset.

 

At the end of the day, Investors do not want to be squeezed or under pressure to sell their assets at a loss because of cash-flow problem, especially on property investment (5-10 year).

 

 

2. Other Commitments

Not all Investors take every single investment seriously, or willingly to commit time for research and monitoring.

 

For example, a full-time working adult won’t have much time left to monitor his / her investment shares daily; not to mention family commitment. Hence, property investment or investing in less volatile shares (e.g. Consumer Goods or Manufacturing) should be more suitable.

 

 

3. Sensitivity to Risk

Risk perception is inherent in every individual. Another Investor may consider what one Investor considers as high risk as moderate risk. 

 

Risk is a function of knowledge and experience.

 

An Investor with good knowledge of global environment (e.g. currency movements, material supply shortage) tends to be more comfortable in making investment decisions (i.e. what, when, how much, exiting, etc).

 

 

4. Investment Alternatives

Options for investment can be numerous, competing for limited capital resources.

 

Weighing these alternatives can be very subjective. Even advices given by Financial Planners or Wealth Managers for the same Investor can be substantially different. Investment alternatives are next to impossible to quantify, after all.

 

It is really up to discretion and careful consideration by the Investor what to invest and the portion of investment.