Strategies for First Time Investor

Nowadays, investment become a job for whole world, much of the investor success their dream with investing their money in to right company. But some of the investors didn’t become a rich person, this is because they didn’t prepare the important information properly when they investing their money. So to avoid this happen again, here are some basic rules that can help the first time investor to investing their money correctly.

1. What is your preferred period of time for this investment?

Have a plan for the length of the time that you wan to invest for, usually for reasonable growth a minimum period is 5 years. But if the longer the term, you have the better chances of making profit over inflation.

2. Know your risk profile and what you are suitable investing in.

There are many tools that can help you evaluate your attitude to the risk profile and you can find many online questionaires on this subject, in fact one of the things a financial adviser will establish is the client’s risk profile.

3. How much of your investment can you afford to lose in the short term?

You must always have a clear idea on how much of your investment that you can afford to lose in the short term. This way can help you to spread your money according to the level of the risk that you are ready to take.

4. Is growth or income is your overall objective?

During the early year, many younger clients would want to achieve high growth or growth in excess of inflation I order to build up their wealth. While for the other older clients in retirement, may want the income option with additional tax saving benefits.

6. Always split your investment as a total percentage 

This is a quite common for many clients to spread their investment portfolios over many types of assets from low risk securities such as deposits and fixed benefit with the medium risk products such as distribution, gilts and bonds right up to higher risk which can include various stock markets, private stocks and shares.

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Barbara Friedberg

7. Have a plan B 

Have a plan B is very helpful for all the investor, if plan A or the market fall, investors can use the plan B to safe themself from plan A.  This will also help you deciding on your reaction should your investment move up or down sharply in the early years is clearly an advantage,  knowing how you will react gives a good indication of how to build your portfolio over the short, medium and longer term.

8. Be clever, always speak to an experienced financial adviser

It is a good thing for you to try a few thing by yourself, but it is very important when dealing with your most important assets such as life savings. Then you can discussing your needs and objectives with a financial adviser to safe yourself a lot of time and trouble. You can also use the financial adviser’s knowledge and experience to safe yourself from the problem in the future.

Investopedia
Investopedia

Source : ezinearticles