How To Invest Successfully
Investment is a way of ensuring financial stability for that unforeseeable future. It is the best way to make your earnings grown to meet your unanticipated requirements. If you keep all your money at home, then, you will never be able to have more money than what you saved. As such, investing your money is a wise choice. But, the main concern is how to make a successful investment?
How To Invest Successfully?
The answer to this question is a little tricky. This is because for each individual the rate of success will differ. For example, some people might be content with a return of even 3% yet others might want it to be as high as 10% – 15%. Then again, the rate of return will also depend on what kind of risk, i.e. low, medium or high, you are investing in. With a low risk investment you cannot but obviously expect high returns and vice-versa.
Basics Of Successful Investment
Most of us are not finance graduates and neither do we have too much interest in the ups and downs of the stock market. For such person’s investment of their hard earned money is a big dilemma. To make life easier for them here is a little guide for successful and sensible investment:
- Know How Much Risk You Are Willing To Take – first and foremost, you need to decide your level of risk tolerance. This means, well before investing, you should know how much loss you will be able to bear and live with. Once you are clear on this matter, you can accordingly decide if you are willing to take your chances with a high risk investment or you want to play safe with a low risk investment.
- Expectation Of Returns – the return on any investment is usually proportionate to the type of risk that one has invested in. So, a low level risk will have lower returns and a high level risk will have a higher return. Based on this, you need to be realistic towards setting up your expectation regarding the rate of return on your investment.
- Amount That You Wish To Invest – most investments usually have a base amount fixed, i.e., you need to invest at least that much amount. Hence, one needs to know how much money they are willing to invest and if they qualify for any investments of fixed base amounts.
- Timeline For Investment – returns are always dependent on the time for which money is invested. Therefore, you need to know for how long you are willing to lock your savings in any investment. Usually ,long investments of five to ten years fare better than those done for a year or two.
- See Your Interest In The Market – there is a very wide choice of investment options available to a person these days. Hence, they need to first see what type of investment, i.e., shares, mutual funds, bonds, debentures, fixed deposits etc., hold their interest. Invest only in those places where you have some knowledge.
- Investment Advisor – if you are one of those to whom each investment option looks the same as any other then, you need help from an investment advisor. Look for an investment advisor who has a proven track record. He or she must be able to explain things clearly to you as they will be investing your money. Above all, they should be trustworthy.