Making investment decisions is not something to be taken lightly. As an investor, the person have to choose one path among several, and that choice will influence financial capacity, present and future.
In order to assess whether an investment is really in our interest, the first thing to do is to clearly determine our objectives, financial availability and attitudes to risk. In short, the first step is to know what kind of investor the person could be.
The choice of intermediaries and products is so wide that the moment of decision may seem complicated. However, it is advisable to ask the right questions to make it easier to distinguish among the available alternatives.
- 1 Tips for better investment
- 1.1 Know your financial objectives and risk tolerance
- 1.2 Seek professional advice for investment decisions
- 1.3 Only allocate the surplus between your income and your common expenses to investment.
- 1.4 Invest for the long term
- 1.5 Diversify
- 1.6 Watch out for costs
- 1.7 Start investing sooner rather than later
- 1.8 Avoid fashions and gurus on duty, as well as emotional decision making
Tips for better investment
Following people will find some tips to make the right decisions at the moment of investment.
Know your financial objectives and risk tolerance
So you can choose investments with a level of risk, return and time horizon that is appropriate to your profile. Take your time and compare alternatives until you find the best fit. Never invest in products you do not understand.
Seek professional advice for investment decisions
But remember that the final responsibility is yours. To avoid disappointment, maintain contact with your broker and determine the extent of your responsibilities and freedom of action, as well as your style and philosophy.
Only allocate the surplus between your income and your common expenses to investment.
Eliminate high interest debt first and clean up your current financial situation before making investment decisions.
Invest for the long term
Markets go up and down, but in the long run there are usually more ups than downs. Stay on track and don’t be distracted by the daily changes.
People have to be always consistent with the timeframe of objectives, it is important to maintain a mix of investments with different time horizons so that the investor can meet different needs as they arise.
Watch out for costs
Compare well the rates and commissions of each entity. They have a major impact on the final profitability of investment.
Start investing sooner rather than later
Of all the factors that affect the accumulation of capital per investment, initial amount invested, amount of the contributions, profitability, time that the investment is maintained but, the most important is the time factor.
Avoid fashions and gurus on duty, as well as emotional decision making
Don’t pursue yesterday’s successes. Historical returns are no guarantee of future returns. Nobody knows what the markets will do. Discipline and patience are important traits for the small investor. Fear and greed are enemies. Investors must avoid buying high when the markets are in euphoria and selling low in times of crisis.