What to know about starting your investments

Here are a few tips that can help you as you start looking at possible investments.

10:18 04 September 2013

If you are thinking of starting up some investments, you might be tempted to head right to the highest possible potential earnings. While that might be of some benefit, it could also cause you some devastating financial losses if you aren’t adequately prepared. Here are a few tips to keep in mind when looking for investments:

• High rates of return—in general the higher the rate of return, the higher the risk. Unless you have money that you can easily afford to lose you won’t want to put all of your funds into investments with high rates of return.

 

• Low rates of return—you might think that if high rates of return mean high risk, that low rates of return might be a lot safer. In general, you would be right, but you don’t want to put all your funds in a low rate of return either because you won’t be able to earn enough to meet your future financial goals.

 

• There is no exact rule—when it comes to investments you have to do comparisons and research. There isn’t necessarily one rule of thumb to follow. Ideally, you want to find an investment with the lowest possible risk, and the highest possible return. As you can see, that isn’t something you will find unless you have comparisons.

 

• Investment management—one of the best things you can do is decide whether you want to attempt your investments alone, or with the help of a financial professional. You can decide how much you want to be involved with the process, and even how much risk you are willing to take. One of the easiest ways is to pool your investments with those of others and the money is collectively invested in a combination of funds to reduce the risk and enhance the profitability.