About Investing

What is Investing?
An investment is something you buy hoping it will increase in value and that you will be able to sell it in the future at a higher price and make a profit. If you are buying an antique or oil painting, then this investment is an asset you hope to sell at a later date at an increased value. If this is not the intention of your purchase, then it is not strictly speaking an investment. It’s simply a purchase.

This principle applies to all types of purchases whether equipment, shares, or property, or other assets. Make sure you learn about the background involved in investing. Talk to a good financial adviser or investment consultant before outlaying any cash. A good adviser will guide you on an investment, but of course you will have to make the final decision after weighing up all the advantages and disadvantages of that particular investment. It is very important to set down a plan to invest and then start it.

Are Investments Risky?
Everything to do with money or finances involves some risk. Investments are no different. Some investments carry more risk than others. If you are considering a variety of options for investment products, then make sure you check out the risk factor of each and weigh it up with the potential return.

As an investor, you need to familiarise yourself with the basics of investing and this may mean attending a financial or investment course and discussing your requirements with financial investment experts and advisers. Many people lose out when first investing because they are not familiar with all the areas which need clarification in order to succeed.

If you are a new investor, you should always discuss your requirements and seek advice from a qualified investment adviser. In this way you will learn about what to do and what not to do and hopefully minimise any losses that could occur.

To answer the question – there are risks in investment.

Plans to Invest
It’s no use commencing an investment unless you set down a plan. An investment plan is simply an investment map, which shows what you want to achieve and how to achieve your goals. Before you start investing, you must have some spare funds to invest, but flying ahead without a plan could mean the loss of those funds in a very short time. Cash available for investment is a very important part of the mix, but just as important is a sound plan.

There are generally two areas to any investment plan and these are:

  1. The part of the plan that enables you to have basic financial security (gives you lower risk).
  2. The part of the plan that allows you to be a little more active and creative in your quest to create good capital growth (a higher risk).

How do I Start an Investment Plan?
There are 7 steps in establishing your own investment plan:

  1. Work out your present financial status.
  2. Assess your view of the future in terms of various scenarios.
  3. Work out your financial goals and objectives.
  4. Put your goals and objectives in order of priority.
  5. Develop your portfolio of investments that would meet your goals and objectives.
  6. Put into plan the action proposed on those investments.
  7. Continually monitor and review how your investment plans are going.