What Makes a Successful Investor, or Why Numbers Aren’t Everything
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FINANCE
January and February had seen gains. But a 4.35 per
cent decline in March was enough to wipe out almost
all of those gains.
After the first quarter, the index stood at 0.31 per
cent; by the end of the first half of the year, it had risen
to 8.72 per cent. This shows just how dramatically
the situation can change within a matter of months.
By comparison, the index returned 5.91 per cent
for the whole of 2025.
This development also shows why decisions made
in response to short–term declines can be problematic.
And information was not what was lacking — the March
downturn was reported everywhere, and everyone
could watch it unfold in real time on their phone.
The figures shown relate to past performance
and the historical development of the index. Past
performance is not a reliable indicator of future
performance and does not reflect the outcome of any
specific investment.
Why So Many People Sell at Times Like These
The answer is simple and applies across generations:
a loss hurts roughly twice as much as an equivalent gain
feels good. This single imbalance explains the three
different situations I encounter most often in practice.
Money that never gets invested. According
to the Ipsos survey mentioned above, three–quarters
of Czechs keep their savings in savings accounts.
And at the moment, there is little downside to doing
so. Interest rates are around four per cent, usually
subject to certain conditions, while the Ministry
of Finance’s August forecast puts average inflation
for this year at 2.2 per cent. In real terms, the money
is not losing value. That is precisely why the decision
gets postponed: the figure on your statement gives you
no reason to act. But interest rates change, while your
investment horizon remains the same.
The need to do something. During a downturn, doing
nothing can feel like failure. Yet a short–term decline
in itself does not necessarily justify changing a long–
term plan.
Investing by headline. In the second quarter, technology
and semiconductor stocks drove the market –
exactly the sectors you were reading about in every
newspaper. But by the time a particular investment
becomes a major talking point, some of its growth
may already be behind it. A headline, therefore, is not
an investment strategy.
All three situations have one thing in common.
Decisions are driven by how a number makes us
feel, rather than by a carefully considered plan made
in advance.
And a Higher Number Will Not Fix That Feeling
Let us say your portfolio grows exactly as you had
hoped. Give yourself an extra ten thousand crowns
a month, and within six months you will miss that
money just as much as you did before. This is known
as hedonic adaptation, and it applies to investing too:
once you get used to one figure, you start wanting
a higher one. Peace of mind, then, does not come
from the size of your balance, but from knowing why
that money is there in the first place.
What Follows from This
When making an investment decision, it is important
to consider how much of a decline the investor is able
to tolerate. Since higher expected returns are always
associated with higher risk, greater volatility or lower
liquidity, being able to stay calm during a downturn
is part of the brief, not a weakness.
One general principle is to distinguish between funds
according to their purpose and time horizon. When
deciding on a specific investment instrument, it is then
necessary to understand its characteristics, risks,
liquidity and investment horizon.
It is also worth relying on primary sources. The Czech
Capital Market Association (AKAT) publishes
quarterly market statistics, the Czech National Bank
publishes its forecast, and the Ministry of Finance its
macroeconomic forecast. All of it is publicly available
and free of charge. None of those figures, however,
can tell you what you personally should do. That
remains up to you, or perhaps to someone you can go
through it with.
A successful investor today is not the person
with the most information. It is the person who is able
to stick with their decision.
Ing. Jakub Lukšík, Investment Specialist,
ROYAL VISION s.r.o.
This text is for general informational and educational
purposes only. It does not constitute investment advice
or an individualised recommendation to buy or sell any
specific investment instrument.
JakubLukšík works at 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 arranges
investment instruments, insurance and other nancial
products, including products oered by the DRFG
Group, and receives remuneraon for arranging them.
Warning: Invesng in investment instruments
involves risk, including the risk of losing some or all
of the amount invested. The value of an investment
may uctuate, and the return of the funds invested
is not guaranteed. Past performance is not a reliable
indicator of future performance.