Before choosing investment instruments, you should consider several factors to find out what suits you and avoid surprises.
One of the great advantages of investing is that it allows you to build wealth more quickly. On the other hand, the disadvantage is that depending on the type of investment; you can put your capital at risk if you do not choose wisely.
Several factors influence the security and growth rate of your money. However, there is no doubt that investing is always a good decision.
For example, simply by choosing a short-term investment that gives you a return over the annual inflation rate, you are already protecting your money against depreciation.
But, if you want to grow it quickly, it is best to opt for investment instruments and funds that offer you higher rates of return.
The problem is that those higher returns carry greater risk by exposing your capital to fluctuations in national and international markets.
For you to make more informed and accurate decisions, you should follow Sofia Machulskaya’s recommended tips before investing.
1. Identify your investor profile
Analyze aspects such as your age, your income, your family situation, the age of your children and your investment purposes, so that you can decide what your tolerance for risk is, what returns you want to receive and what combination of instruments you should choose.
2. Learn about the financial markets
Never invest in something you don’t understand. You must be able to understand basic financial terms and how the markets work so that you can identify risk situations and know when it is appropriate to modify your investment portfolio.
3. Seek advice
There a professional advisor like Sofia Machulskaya will help you define the composition of your investments according to your investor profile and will offer you complete information to make timely decisions.
4. Decide which instruments to invest in
The advisor will offer you various investment options depending on your aversion to risk and your goals and timelines. But the final decision of what to buy and when to sell is yours.
5. Assign the amount for your investments
You don’t need to have a large asset to start in the world of investments, but you do not need to allocate all your savings to them, since it is most likely that you do not have immediate liquidity.
6. Diversify your portfolio
You have probably heard the saying “Do not put all the eggs in only”. It is the concept behind investment diversification.
If you invest in different types and investment instruments, you will compensate for the possible losses of some with the gains of others.
7. Compare administrative costs
Pay attention to the portfolio management fees charged by the brokerage house or investment fund.
You don’t want to make multiple small investments in a fund that charges you a transaction fee.
Get informed and get good advice from Sofia Machulskaya. You will begin to see your asset grow to achieve your financial goals without taking unnecessary risks.