Putting the Process of Strategic Investing into Practice

Abstract

Recapping our key findings, we emphasize that:

• 1. Wealth cannot be created by following traditional investment advice. If you invest according to the traditional diversification concepts and capital market theory promoted by the finance industry, you may be able to preserve wealth or, in the best case, generate marginal returns.

• 2. To create wealth an investor must apply strategic concepts to develop an investment strategy that:

• • builds on investor strengths and core competencies

• • exploits opportunities

• • uses networks

• • incorporates an investment approach that differentiates the investor from others

• • prevents threats and handles risks appropriately

• • observes trends and cycles and invests accordingly

• • is executed with high efficiency

• The strategic investor must build strengths and core competencies, and use available resources (personal time, finances, IT, and so on) in a concentrated manner.

• 3. It is advisable to develop the strategy through a formal process, as illustrated in Figure 8.1.