When Investing, Focus on Process, NOT the Outcome!

This is a short blog post because a) your time is valuable and b) this simple universal truth as to why everyone in our Global Investor Alliance will succeed in building wealth over the long-term…

If you consider any field of activity where different probabilities play a role, the outcome is largely unknown because of the many variables that you cannot control.

Research has also identified a common trait among successful performers in any field, that they all value process over outcome.

Let’s apply this to investing for a second. Across the internet, you will see many claims by so-called experts and gurus in investing that highlight the outcome; you will make X amount in so many months or years. Rarely do they detail the process used to get to this outcome (hint: sometimes the claim isn’t really true and often times, it was a set of factors that aligned for them which might not align for you!)

Now of course the result or outcome does matter, as that is the ultimate measure of long-term investing success. But if a result without clear process occurred, how much of it can be attributed to luck?

Which is why we believe that if you focus only on the outcome, you are less likely to achieve great results. Whereas if you focus on a clear and solid process, backed up by data and research, we believe the outcome will take care of itself.

So when it comes to investing in Real Estate, all of us at the Global Investor Alliance focus on our investment process, not the outcome. We check out macro market data for the location we think has the best population, employment, income and house/condo price growth. We check out the micro data for the neighborhood we intend to buy in, looking at quality of schools, hopefully declining crime statistics and ensuring commute times are under 30 minutes to a large swathe of jobs. We run potential buildings through an analysis tool to ensure metrics are met and then engage in sensitivity analysis to ensure a repeat of the 2008 Global Financial Crisis doesn’t create negative cashflow.

So if you aren’t willing to create the right investing process that suits the asset class you are investing in, you face the probability of ending up with a poor result.

Over the long-term, a great investing process delivers better and more reliable wealth-building results. You can take this advice, literally, to the bank!

And remember that good luck, most often, favors a good process ;)

To learn our data-driven process for investing in solid asset-backed real estate to ensure your wealth grows over the long-term, please get in touch here.

To your success,

Peter & Karen

 

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