Embarking on your first investment journey might be very frightening as there exists so many things you need to understand before doing so. Additionally, both the opportunities and risks are arguably equal.
The most fundamental reason why investing for the very first time is frightening is because it deals with money. We are not talking about small pennies here.
Even worse, a major number of people have failed to start their first investment correctly due to not having enough clue. Starting the very first requires a very thorough analysis, research and consideration, that’s why financial consultants exists.
However, we are not writing to promote the services of a financial consultant or planner. What we are going to discuss here is the three basic, most fundamental steps you need to carry out prior to making an investment.
Also Read: The Problem(s) with Systematic Investment Plan
Rethink Your Internal Factors
The internal factors you need to review refer to your goals, financial needs, and the capacity to invest. Your capacity to invest, in addition, consists of your net worth, monthly income, investment duration, and the gradual returns you want to earn.
One does not simply conduct a research on securities without assessing their internal factors. Furthermore, knowing what you want and need in your financial life will help you redefine how you want to achieve it.
Do Your Research and Make Your Plan
After assessing your internal factors, it is time for you to conduct a research to generate your investment plan. You can start by listing the securities you find profitable and possibly prospective in the future.
That said, you should never choose only one answer after listing the securities. The basic rule dictates that you need to diversify your investment in order to mitigate the risks.
Decide How You Want to Do it
After knowing what securities you want to invest in, you can proceed to the next step, which is the decision-making stage. During this phase, you should decide how you want to carry out your investment plans.
Accordingly, you must always consult to investment strategies before really going through with investing. These strategies help you think of the most appropriate way to achieve what you want while, at the same time, avoiding possible risks.
Also Read: Diversification, a Concept to Secure Your Investment
