Planning for Investments
Why is it that some people brim with ideas about making their money work for them better while others just let their money sit in fixed deposits? How can one who is not investment savvy still tap the potentially higher returns of investing their money instead of letting it sit in the banks? Find out about the 3 important principles of investment.
Planning for Investments
Investment planning is about making the right investment decisions and taking the necessary actions that will grow the value of the assets you own. While investment can be a complex and even mystifying subject for many people, some basic knowledge and understanding can help you invest with greater confidence and success.
Investing no doubt entails risk because of market volatility. The extent and characteristics of such fluctuations vary with assets classes. But with proper advice and guidance, we can help you make volatility work to your advantage. Bank deposits are often seen as a very safe instrument, but when bank rates continue to trail behind the rate of inflation, the value of your deposit actually falls over time. By taking calculated risks with professional guidance, you will achieve asset growth in real terms over the long term
The first step to investing is to know yourself in terms of your attitude towards risk. First, your capacity to take risk is measured by your personal and financial circumstances. Next, your appetite for risk is influenced by your personality and your familiarity with investment markets. So what works well for someone may not work so well for you. A good understanding of yourself in this regard will help you set the right expectations. (Read more : Client to Adviser)
Know Your Investment
Different asset classes perform differently in changing market conditions. Identifying the appropriate instruments that are better aligned with your personal profile and expectations is a critical success factor. Equally important is understanding that time is an essential factor for your investment to ride over market cycles in order to achieve real gains.
Time is another critical factor to achieving success in investing. The compounding effect of asset growth to yield higher returns requires discipline and tenacity to stay invested over the long term. On the other hand, making strategic changes to preserve your capital will reduce risk and enhance long term performance of your portfolio.