There are several different types of investments, and there are many factors in determining where you should invest your money.
Of course, determining where you will invest begins with researching the various available types of investments, determining your risk tolerance, and determining your investment style once you have determined your financial goals.
KNOW YOUR INVESTMENT GOALS
Remember, without a financial goal, you will lack the clear vision to know what you want to achieve by investing. It would be a bit like starting to run a race, but not having any idea where the finish line was supposed to be.
SHORT-TERM VERSUS LONG-TERM INVESTMENT GOALS
So, what is your financial goal? Do you have a list of short-, medium-, and long-term ones? A new house will probably be more short to medium term than say, a college fund if your children are in diapers, or a retirement fund if you’ve just got your first job.
If you were going to purchase a new car, you would do quite a bit of research before making a final decision and a purchase. You would never consider purchasing a car that you had not fully researched, examined, determined if it was suitable for your overall lifestyle (eg, a two-seater sports car is not practical if you have 4 children and a Great Dane. Or even just the Great Dane!)
You will examine the details, look at the performance history of the car, and take for a test drive. You might even get recommendations from friends and review sites online.
The good news is, investing works much the same way.
RESEARCH THE MARKET
You will of course want to learn as much about the investment as possible before plunking down your hard-earned cash, and you would want to see how past investors have done as well.
STOCKS AND SHARES
Learning about the stock market and investments can take a fair amount of time depending on the kinds of investments you are interested in, and there can be all sorts of applicable fees, or even hidden fees you might not be aware of until you are actually investing online.
So any research you do before you risk one penny will be time well spent. There are numerous websites to help first-time investors, and you can even take courses online or at your local college.
Continued in: Determining Where To Invest Your Money Part II