scorecardresearchAbigail Johnson of Fidelity has her investment philosophy grounded in logic and experience; 4 key points

Abigail Johnson of Fidelity has her investment philosophy grounded in logic and experience; 4 key points

Updated: 09 Aug 2022, 07:51 AM IST
TL;DR.
Abigail Johnson’s name shines bright in the world of investing. Among the few women investors that the world knows, Johnson carved a name for herself with her investment styles that still stand the test of time.
Create value with long-term investments

Create value with long-term investments

Step into the world of investing, and you will find both old and new investors swearing by Warren Buffett’s investing philosophy, Peter Lynch’s learnings, Howard Mark’s experiences and George Soros’ tactics. This leaves us to think if investing is solely a male-dominated area wherein investors skim between the best opportunities available. Do women fail to make investment decisions or are they relegated to the corner to remain shadowed all their lives?

However, while looking for a female investor, we frequently come across details of Abigail Johnson who is currently the President of Financial Services at Fidelity Investments.

Johnson is one of the few women who rose to eminence in the financial services industry, her current net worth is estimated at $17.2 billion. This woman who maintained her position in the highest echelons of industry leadership has some interesting money lessons to share. These include:

Be cautious with debt

How many times do we see people buying assets with borrowed money? This can be dangerous and financially toxic considering how many people pay for their daily expenses using credit cards. With people losing their money in the stock markets and using their remaining money to repay their loans, many people have resorted to taking debt for current consumption. 

Too much debt can create a dent in one’s savings while overwhelming one’s personal finance decisions. Treat your finances like a company’s balance sheet and then you will realize how incurring too many liabilities in the form of credit card debt or loans can be detrimental to your financial growth.

Debt is debt

There is nothing called “good debt” and “bad debt”. You must beware of these superficial terms coined by marketers to sell home and educational loans. While taking some loans may be necessary to ensure good education and a comfortable home, the same must be repaid in time or prepaid if possible. Prolonging the debt only increases the interest component, thus, forcing you to shell out more during loan repayment. Repaying the loan on or before the due date will also leave you with enough money to save and invest.

Invest in a long term

It is not easy to create wealth. If earning and saving enough to secure the future had been easy, a lot of us would have been sitting on stashes of money and heaps of wealth uncounted. You must have the conviction to choose the right investments and then stay with them for life. Invest for a long term that would help you withstand market downturns. Choosing to stay invested for a prolonged period also forces you to continue your investments in a disciplined manner.

Know your risk

Not all assets may suit everyone’s investment style. This means that you must choose your assets as per your risk appetite. Do not invest in assets based on hearsay. Instead, choose your assets based on empirical data and logic. Do not focus on earning in the short run; instead, focus on creating value in the long run.

It takes a lot to figure out how to invest successfully. Investing is an art that you develop into a craft only with continued learning and a drive to improve your thinking at every step. For someone like Abigail Johnson, the secret recipe to being a successful investor is the willingness to do whatever it takes to do the right thing.

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First Published: 09 Aug 2022, 07:51 AM IST