Become better informed as an investor by understanding your money priorities and different investment options available to you.
Empower yourself with the ability to make smarter investment decisions by becoming a more informed investor. Begin your journey to being more informed with the following practices:
Examine your Investments
Did you know that if you are investing in wine, you’ll need to purchase large quantities if you are expecting major returns? Or that you’ll also have to spend on preserving the wine quality so that the wine fetches a high price over time?
A thorough study of your investment options is basic to understanding your financial feasibility and better investing. If you are looking for extremely safe options where you’ll not lose any money, perhaps bank fixed deposits are ideal for you.
If you are looking for considerable gains, several options including bonds, stocks, shares, real estate, venture capital, commodities, coins, art and fine wine, are available. Each of these options varies in the degree of risk involved. Analyse investments on the basis of their potential and your risk-taking capability.
Know about Multiple Investing
Different investments come with different features. An investment may yield guaranteed monthly, low returns, while another could fetch you considerable gains, over years though. Some investments could fetch you tax benefits. There are also investments designed to benefit a specific purpose, such as retirement and education.
Consider spreading your investment across different options instead of one. This way, you can lower the risk arising from putting all your money in one single investment; the good performance of one investment could counter a bad performance of another.
Assess your Money Needs before Investing
Whether you decide to opt for a single investment or multiple, ensure your strategy is in alignment with your money needs. Investing savings that you need for the next year in a scheme that locks your money for, say 5 years, isn’t alignment. Look instead for investment options that can fetch you enough returns on the money for one year.
Segregate your savings according to your commitments – money that you need immediately, in the near future (e.g. your teen’s college education), and in the distant future (e.g. your after-retirement). Choose investment options based on these criteria.
You could opt for bonds for the near future and stocks for the distant future as performance of stocks can be reasonably gauged only over a period of time. Again, consider the benefits and risks associated with each. While stocks can yield more if the issuing company performs well, bonds come with the safety of guaranteed yields.
Team Up with a Reliable Financial Advisor
Hiring a financial advisor can be your best strategy if you are unsure of going about investments on your own. Financial planners guide you on the best investment strategies according to your financial needs. What is crucial though is that you end up with a reliable financial planner (Related: How to Ensure you Choose a Reliable #Financial Planner).
What’s your financial vow for this Women’s Day? Share with us here.
Don’t forget to subscribe to our RSS-feed and follow us on Twitter, LinkedIn, and Google+ for recent updates.
No comments:
Post a Comment