A fourth problem to retaining the value of your wealth is the markets themselves, given, as is their nature, to continual, often rapid, fluctuations. Interest rates, the prices of shares, currencies, the value of land, they all fluctuate.

Markets match demand and supply and the price depends on the participants' outlook for the future. This, in turn, depends on all factors imaginable, including the pitfalls we are considering here.

Everything impinges on price. Markets just make it possible for you to shift your stake from one company or one investment to another. Fluctuations, therefore, are unavoidable. You can try to hedge against certain fluctuations but if you try to hedge away all risk you will not have anything left; better to sell everything and stay away.

This simple fact, that markets fluctuate, is the most difficult thing for people to accept. Perhaps it is because we need stability, because we live on generally solid ground. But there is not much one can say about markets rather than that they fluctuate. To be a good investor you have to make the best of this fluctuation.

Sometimes war can make you lose money, sometimes not. One way to learn about the market is to study how it behaved under different circumstances.

The logic of things repeats itself but not the facts. The behaviour of markets in war is much the same. In general, the expenditure which war engenders helps markets so long as the market feels that the country can sustain the expenditure. Perceived victories also help.

Then there is proximity. If the war starts being fought near the core operations of the companies or the investment concerned, then it is bearish and shares fall. As war unfolds, one has to observe and move accordingly.

A wealth roller-coaster is technology. The commercial changes caused by technology are very powerful social and investment forces. These forces often come from sources one least expects.

The millennium bug never happened but cost a lot of money. Many who worked in computing were, indeed, industry leaders. They did not have an inkling of eventual demand. In the US, at one time, everyone went crazy about radio shares. Some time ago it was the internet.

We have two problems here: first, assessing the long-term significance of the new technology itself and its effects on other existing technologies; and, second, assessing the market premium which this technology should get in the market. Should a company with the technology sell at 20, 30, 40 times earnings? Technology cuts both ways.

Other related problems are hard to categorise but let us just call them economic transformations. One of these is changing trade routes.

Petra, in Jordan, for example, was once a major trading centre; let us call it a hub, at which important trade routes used to cross. It, then, lost its importance and for ages was buried in sand until it was re-discovered.

When I was a boy Mtarfa was like that. When the British left the island it was left to rot until the government developed it into a housing estate. The economy is a living thing; it brings changes. Business migrates. New businesses are set up, others go bankrupt.

Personal psychology and biases also feature prominently. There are people who invest in shares because that is the popular thing to do or conversely, those who put off investing in shares because all their friends seem to be avoiding them, only then to invest when it is too late. When all the others are doing it. One should guard against the bias of doing things when and if they are popular.

On the other hand there are others who invest against the crowd; they go it alone. Sometimes this leads to great rewards. Usually, this sort of style takes a lot of conviction, if not pig-headedness, and such investors are usually willing to see their capital dwindle hoping that eventually the market will prove them right. The market is very impersonal and often deals them mortal blows. So you can invest against the crowd. But if you do, keep in mind that that there are many of them and few of you.

There are people who invest in shares but whose mind-frame is not made for that kind of investment. They worry too much. They cannot handle the uncertainty. Investing in shares, for example, entails contracting the ultimate risk, so far as money and enterprise is concerned. If it is not good for you, avoid it.

Certain people are not willing to consider investments other than in certain areas, such as the UK, the US, or in their home country, say, Malta. I have come across this very often. It must be guarded against.

Investment is not about such concepts as nationalism, cultural allegiance, and where one wishes to visit as a tourist. Every seasoned businessman can tell you that it is a tough world keeping and making money. Investment is about this hard-nosed task and there is very little place, if any, for sentimentality.

Different investors have different approaches to investment. Men usually invest differently from women; young people invest differently from those who are getting on in years; and personal investors usually differ from professional ones, unless they have trained themselves sufficiently.

Understanding what is happening is of utmost importance. Investors find this difficult, even very big ones.

Nobody knows exactly all that is happening. Perhaps it won't make us happier if we knew, but it would probably make us better at guessing the future.

The non-professional investor, whose main job is other than managing money, also finds finance and its concepts inherently difficult. This adds to the uncertainty. Your adviser can help you, if there is trust.

I have been going through various pitfalls and dangers. As I said at the start, these should be taken positively, not negatively. They should, as much as possible, be seen as opportunities rather than threats.

If you know some of the traps in the investment jungle you would be able to make more progress. However much you know, or think you know, there are always bound to be surprises and disappointments. But, in general, knowledge and being assiduous help.

(Market View will return in May).

Paul V. Azzopardi is managing director of Azzopardi Investment Management Limited (www.azzopardi.com) which is licensed by the MFSA to provide investment services, including stockbroking. This article is only meant to provide information, which the writer believes to be accurate at the time of writing, and is not intended to give investment advice and its contents should not be construed as such. The value of securities, and the currencies in which they are denominated, may go down as well as up. Readers are requested to seek professional financial advice tailored to their own personal circumstances.