Investing Your Money (2)

Step 2 – Know the key issues to consider when investing

          As investments are long-term commitments, you must consider your ability to invest before you commit yourself. Among the key issues to consider are:

o How much money do you have for a medium to long-term commitment?

o Do you fully understand the product that you are investing in?
o Does the intended investment fit into your overall portfolio?
o Have you compared returns on other similar investments?
o Do you understand the risks involved and do you know your tolerance level for loss? (i.e. how much changes in the price/value of your investments can you tolerate)
o What are your expectations towards returns on your investments? (i.e. how much returns will you be satisfied with)
o What is your time horizon for the investment? (eg. 5 years, 10 years, etc.)
o Do you have the flexibility to sell the investment in the event of emergency?
o How can you monitor the performance of your investments against your changing needs?

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Source: bankinginfo.com.my