Things You Should Know Before Making An Investment

By | November 26, 2018

In contrast to the general belief, we don’t need to be an expert to start investing. The lure of big money has thrown the investors trapped into the lap of stock markets, mutual funds,and cryptocurrency trading. But many times, we fail to get started managing our money because we are too intimidated or don’t know where to start. The growing inflation across the globe lops an average of 3.5% off our money’s value every year, so, investment is the only possible way to grow money rapid enough to outpace it. The Investment comes in different forms and shapes, it is up to us to decide where to put our hard earned money. Click to read the basics before diving in the ocean of investments.

  1. The investor’s option is heavily influenced by the decision of friends, relatives and close acquaintances. If everybody around invests in a particular area or buy a particular stock, we too tend to do the same. But we should be cautious that this strategy could backfire in a long run. So, it is important to get rid of the herd mentality.
  2. Taking an informed decision is essential. Many times, we, the investors generally go by the name and reputation of the company or a scheme. This is not the right way to choose an investment option. Proper research and analysis of expected outcome are necessary before investing.
  3. Rather than investing in stocks and shares, it is good to invest in a business, which we are familiar with and interested in. It is not advisable to risk a lot of money in something which we are not clear about. Because business has its own ups and downs, and it is highly probable that the amateurs may end up losing their capital.
  4. ‘You are never too old to invest’ is just an excuse to hide the money under the mattress. The biggest asset is actually the time. The advantage of investing early in life is that if we lose money in the market, we will have a lot of time to make it back before we need it.
  5. We should be clear with the purpose of our investments. Once we have our objectives established- saving for a holiday, home, post-retirement or kid’s education, the time frame will be clear and we will be able to figure out how and where should we invest the money.