Making a smart investment decision may not be easy as it sounds, but the reality is that it is slow and steady in nature. Authentic investments do not grow rapidly within a short period. That is why people that are greedy in nature always fall victims by making wrong financial investments.
There is need to understand the business or investment one proposes to venture. If any investment promises a huge return within a short period while investing a little amount of money, you might need to look at it twice. The reverse is usually the case.
Even these days banks pay a ridiculous amount as interest rates to customers. It is an investment area which I do not recommend on a savings account, even if they do it’s just meager.
First things first, it is when you have saved enough money, you should start thinking of investing. If you don’t your money starts depreciating. So, you need to start investing to avoid this from happening.
Here are a few financial investment tips you should know:
Buying stock is good. It’s a long-term investment strategy and it’s not a difficult investment type. All you need is to decide if you will go through a stockbroker or even an online brokerage firm.
It is critical you look for stockbrokers you can trust but that doesn’t mean you will not do your evaluation. You have to evaluate the stock, and probably make a decision concerning the rate at which you want to buy them.
The brokers will usually execute the trading on your behalf. What you need to do is to open a brokerage account and that is what most investors do. You can purchase stocks directly through the company
Invest in Familiar Things you know About
It is not advisable to invest in a market where you are not familiar with its product or service. When you hear a term such as “price of stocks has fallen”, you wouldn’t be taken unawares.
“If you want to get your feet wet and try it out, buying Apple shares because you own the iPhone, the iPad, the iThis and iThat is a great strategy,” Small says.
“But you have to separate that from more serious investing. If you are someone who is in their early 30s, you’re looking to perhaps buy a house. You want to invest more for the long-term where you’re investing with a certain goal in mind.”
You don’t venture into something you know nothing about. There are tons of investments out there, but you need to identify few of them that interest you.
Alternatively, you could speak with someone who is knowledgeable about investments to advice you on what to do.
“Once you understand all the different types of accounts, the pros, and cons, then you’re more educated to make those appropriate decisions,” says Small.
I hope this was useful, let me know your thoughts on the comment session.
Try Mutual Funds
Joining others to create mutual funds is a good investment tip for newbies.
For instance in Nigeria, a mutual fund is operated by an investment arm of most financial institutions.
And are usually operated by investment firms made up of people who understand money and capital market.
“The best way to describe mutual funds is it’s a basket of investments says Allan Small, a senior investment adviser with DWM Securities.
Everybody puts any amount of money they want into this basket. The average mutual fund basket might have in it $500-million or $1-billion.
There’s this mutual fund manager whose job is to decide where to invest this basket of money,” he says.
The juicy part of investing in a mutual fund is that a large amount of money is churned out and shared annually or biannually depending on the prospectus.