One of the most oft repeated questions people want answered is ‘what is a good investment?’ In a world teeming with investment fund options, stock market options, gilt edged securities, heavy metal options and other options too numerous to mention, how do we choose where to invest the money.
In the simplest of terms a good investment is one that leads to quick return on investment. What you need to determine is how much money to invest. In order to determine how much money you need to invest, you have to consider various factors that form a part of the investment itself. At the top of the list are your goals for making an investment. Then you have to consider how much money you make and what you can realistically spare for investment purposes. This necessitates taking a close look at your expenditure outlay each month. The sort of risks you are willing to take will tie into how much money you can afford to lose should an investment go bad.
There are different types of investors based on the amount of money they have, the type of risk they are willing to take and the amount they are willing to lose if the investment fails. Long term investors are interested in a margin of safety. This could be in the form of cash in the bank, ownership of assets or property the company has to cover losses. This margin of safety will protect the stock in a time of recession. A good investment in a rock solid company with good prospects offers stability as well as the ability to pay a steady return on the investment.
When planning to invest your money, you should know that you there are many different investment types in the marketplace. You have stocks, bonds, mutual funds, real estate and more. The only complication is the extended over engineered amount of information that is available about investing.
Investing in stocks are one of the scariest places that a beginning investor puts his money in. Only because of the lack education about the marketplace, as well as the high risk involved in it.
Understanding what is involved helps an investor determine if he or she should invest aggressively, moderately or conservatively.Some of the more conservative investors will invest in CDs, T-bills, and options, because they are low risk investments and can be leveraged in a longer period of time.
A moderate investor may diversify their investments a little more. They may put a certain portion in the stock market, another portion in real estate, and maybe bonds. They like to invest in low risk investments as well as put a portion of their returns into a more aggressive investment.
A more aggressive investor will more than likely put their a great amount of their money into a vehicle that suits their strong point. They may put seventy percent of their money into the stock market, ten percent into real estate, and the rest into bonds or options. Either way they primarily put a great amount of money into a single investment field.
Try finding your niche and strong point before investing in anything that you want to put your money in. Understanding what you are comfortable with and the amount of money you can actually invest will determine the beginning of your success.
Wesley E Anderson