Once you know your asset mix, you can choose specific investments.
Before you choose an investment, understand how it
works and the risks involved
Ask yourself:
How
does the investment work? Do you understand
the investment well enough to explain it to someone else?
What
are your goals? Are you looking for safety, income or growth from this investment? Or both
growth and income?
What
are the risks of this investment? Are you
comfortable taking these risks?
How
much do you expect to earn on this investment? Is
this realistic?
How
long do you plan to invest? Is
this a short-, medium- or long-terminvestment?
What
are the costs to buy, hold and sell the investment? And
will you pay taxes on the money you earn?
What
other investments do you have already? How does
this investment fit with your other investments? How will it change your asset mix?
KEY POINT
6
steps to investing:
1. Set
your goals
2. Know your investing personality
3. Create your plan
4. Choose your asset mix
5. Choose your investments
6. Track your progress
2. Know your investing personality
3. Create your plan
4. Choose your asset mix
5. Choose your investments
6. Track your progress
CAUTION
Never
invest in something you don’t understand. Before you invest, make sure you
understand it well enough to explain it to someone else.
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