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.