Investing Isn’t About Perfect Timing It’s About a Long–Term Approach
58 ǀ POSITIV 3/2026
FINANCE
the portfolio’s dependence on the performance of any
single investment. Diversification does not, of course,
eliminate risk. It is, however, one of the basic ways
of managing risk when investing.
Return Is Not the Whole Story
One of the biggest attractions today is the returns being
advertised. Online, it is very easy to come across offers
highlighting attractive returns and promising interesting
investment opportunities. A percentage figure can
capture attention very quickly.
But return is only one part of the investment story.
It is equally important to know who is offering
the investment, how the company operates, what
the money is actually being invested in, where the return
is expected to come from, what the risks are, and what
could happen if the investment does not perform as
expected. Costs, withdrawal conditions and the option
of exiting the investment early are also important.
This is where an inexperienced investor can easily be
drawn in by an attractive promise without checking all
the key information. In the worst–case scenario, they
may lose not only the expected return, but also part or
all of the amount invested.
That is why the first question should not be, “How
much will I make from this?” but rather, “Who am
I entrusting my money to, and do I understand what
I am investing in?”
Risk Is Not Just a Number
Another thing that needs to be properly understood
before investing is your own attitude to risk. Every investor
has a different level of experience and a different ability
to accept fluctuations in the value of an investment.
On paper, a certain level of decline may look acceptable.
But when someone actually sees the value of their
money falling, they may react very differently. If they are
not prepared for such a situation, fear may lead them
to sell the investment at precisely the wrong moment.
When making an investment decision, it is therefore
important to consider not only the return an investor
expects, but also the level of decline they are able
to accept both psychologically and financially.
Investing on Your Own or With a Professional?
Today, practically anyone can invest independently.
For an experienced person who understands financial
markets, knows how to verify information and is able
to manage risk, this can be a natural approach.
For a beginner, however, it can be useful to have
someone alongside them who can explain how different
investment instruments work before they decide which
one to choose.
In my view, before making an investment decision,
every investor should first be clear about why they want
to invest, how long their funds can remain invested,
what experience they have with investing and how they
perceive the associated risks. When working with clients,
we therefore focus not only on the investment instruments
themselves, but also on ensuring that clients understand
their characteristics, risks and other important parameters.
We also discuss how the client might feel if the value
of their investment were to fall temporarily. This is not
to discourage them from investing, but to ensure that
they understand the risks associated with the investment
instruments they are considering and can make
an informed decision based on their own judgement.
In my view, this aspect is often underestimated.
An investment may look good on paper, but if an investor
becomes uncertain at the first significant downturn
and decides to withdraw their money out of fear,
they may seriously disrupt their long–term plan. That
is why I consider it important for clients to understand
the potential fluctuations in the value of their investment
before making a decision.
The main purpose of such a discussion is to ensure
that, before making an investment decision, the client
has sufficient clear and understandable information
and understands the key characteristics and risks
of the investment instruments being considered.
The final investment decision always rests with the client.
The role of an investment intermediary’s representative
is to provide clear and understandable information
about the investment instruments that may be arranged
as part of the investment service provided, including their
key parameters, risks, costs and liquidity, so that the client
can make a decision based on their own judgement.
Investing is a long–term process in which time, regularity,
diversification and risk all play a role – and, above all,
so does understanding what you are investing your
money in.
Tomáš Mrajca, ROYAL VISION s.r.o.
This article is intended for general informational
and educational purposes only and does not constitute
investment advice or an individualised investment
recommendation.
Warning: Investments in financial instruments involve
risk, including the risk of losing part or all of the amount
invested. The value of an investment may fluctuate
and the return of the invested funds is not guaranteed.
Past performance is not a reliable indicator of future
performance.
TomášMrajcaworks for ROYAL VISION s.r.o.,
Company ID No. 28322584, which is part
of the DRFG Group and acts as a ed agent
of the investment intermediary EFEKTA Brokerpool
a.s., Company ID No. 29048770, registered
in the list of regulated and registered enes
maintained by the Czech Naonal Bank (www.
cnb.cz). The company intermediates investment
instruments, insurance and other nancial products,
including products of the DRFG Group, and receives
remuneraon for arranging them.
| Text: MonikaŠevčíková, foto: KarelJuchelka