5 investment question that suitable for your self
March 23, 2009
To adjust the investment that suitable with your self, there is 5 questions you need to ask on yourself:
1. What you need: income or capital growth?
There are investments that provide income and don’t increase in capital (such as deposits) while it is providing growth capital and only give small income (such as shares, property). Usually both of them proportionate reversed.
Needs of money everyday determine your investment choices. For example, someone aged 40 years and have a high income, may be more interested to invest in stocks, emphasizes a retiree may prefer to invest in deposits that provide interest income each month.
2. How long will you wait for the result?
There are investments that offer the results in one month (such as deposits) and the other may require a period of 25 years to get the optimum result (such as forestry, property). You must also have a time period of your investment.
Invested with the wrong period of time will only cause a loss for you, for example, by placing the money available for short periods of time in the capital market.
3. How much risk can you tolerance?
You must know the level of risk that you may take on,in the financial and psychological. If your financial situation is solid, you can try to invest in a high-risk / high results. But if your financial condition is not strong, you should be able to reject the temptation to take your money with a high risk.
The other important is your psychosis. If you have a tendency to worry in high fluctuation (you can sleep beatifully) You should avoid high-risk investment. Psychosis important in two things. Money and investment should make you safe, not make you nervous. Secondly you do not want your emotions (feelings of fear, greedy) that determine your investment decisions. An investment decision should come from the good thinking,not on emotions.
4. How many levels of investment that you have?
Investment requires skill. Investment does not always require a complex calculation, in general, require only simple arithmetic such as addition, subtraction, multiplication and division (such as: deposits, mutual funds). A professional investor (such as the investment manager) may require a complex modules such as statistics in calculating the value of bonds in the secondary market, the fair market value of shares.
Other skills that may be required is interpersonal relationships and ability to communicate (such as property).
the best and most successful people that investing in property who is they have high ability in the negotiation.
5. How much your time to dedicate for your investment?
your investment choice determine how much time you have to provide for the investment. Usually, investment in stock takes a many time (unless you let someone else manage it for you) than to put money in the deposit.
Many people have to calculate the value of their time. If you have a high earnings and than you need may time to maintain the value of your investment with a good, may be more beneficial for you to pay the other person that can do well (such as investment managers) while you are still working. From the files above, has you make the investment in that suitable for your self?
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