How to avoid making bad investment decisions on the stock market right now: fundie

Fidelity International's head of investments Paul Taylor provides his top 5 tips for ASX investors today.

| More on:
A senior investor wearing glasses sits at his desk and works on his ASX shares portfolio on his laptop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX All Ordinaries Index (ASX: XAO) is only just in the green today, up 0.25%. In the year to date, the 500 biggest ASX shares represented by the All Ords index have lost a collective 12%.

As every investor knows, it's been one seriously bumpy ride. And it's set to continue from here.

So, how do we get through this volatility without making mistakes? And how do we find the courage to jump into a turbulent sea of red to take advantage of opportunities?

Investment theory is 'easy'… in theory

Fidelity International's head of investments Paul Taylor says investment theory is easy but "it's the execution that's hard".

In an article in the Australian Financial Review (AFR), Taylor provides some tips for ASX investors today.

First of all, he acknowledges the challenges that ASX investors are experiencing in 2022:

Periods of volatility and financial downturn present us with a great opportunity to buy good quality companies at reasonable prices, but it's difficult to put this into practice in an uncertain environment.

The disconnect between what we should be doing, and what we actually do is caused by distractions or "noise".

5 tips for buying ASX shares today

Here is an abridged version of Taylor's opinion piece in the AFR today.

4. Simple versus complex: We all know and have probably, at some point, used the pros-and-cons concept to make a decision. In investing, this can sometimes muddy the water. I like to focus on the core reason for holding a stock. The No.1 reason it should be added or removed from the portfolio. Simplifying the process helps to screen out noise and keep me focused.

5. Proactive versus reactive: Being proactive involves making thoughtful decisions in line with your investment goals rather than allowing the market to push you around. So, evaluating companies on their fundamentals and asking, "is this going to be a good or better company in five years' time?"

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Broker Notes

Bell Potter says this growing ASX 200 stock can rise over 40%

Big returns could be on the cards for buyers of this stock.

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Man with rocket wings which have flames coming out of them.
Resources Shares

Up 23% today, why Macquarie forecasts this ASX 200 mining stock could rocket another 33%

Macquarie forecasts more outsized gains to come for this surging ASX 200 mining stock.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Bank Shares

ASX banking sector: Is it time to consider a regional bank?

The big 4 banks are widely considered to be overvalued.

Read more »

A share market analyst looks at his computer screen in front of him showing ASX share price movements
Broker Notes

'Materially undervalued': Brokers name 3 ASX shares ripe for investment

Looking for some FY26 investment inspiration?

Read more »

Happy friends at a party enjoying pizza, symbolising the Domino's share price.
Broker Notes

Buy, hold, or sell Domino's Pizza shares after shock CEO exit? Here's what the experts say

The Domino's share price has been recovering after losing a quarter of its value last Wednesday.

Read more »

Three miners looking at a tablet.
Broker Notes

Does Macquarie prefer Rio Tinto, Fortescue or BHP shares heading into 2026?

BHP, Rio Tinto, or Fortescue? Macquarie only expects one of the three ASX mining stocks to outperform.

Read more »

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Broker Notes

Why are Platinum shares rocketing 13% today?

This fund manager is getting a lot of love from investors today. Let's find out why.

Read more »