Five basic steps in investing

Investment is important in life. Before investing, there’s a lot to figure out and we have to prepare well. If you have a plan to follow, you’ll know better what to do with your money and you’ll worry less. Generally, there are five steps to plan your investments

1. Set your goals
Figure out:
What are my top financial goals?
When do I hope to reach those goals?
How much money do I want to save?

2. Find out what kind of investor you are
Figure out:
How do I want to approach investing?
How important is it to me to keep my money safe?
How comfortable am I with the idea that I may sometimes lose money if I want to grow my savings faster?
How important it is to me to make a good return on my investments?

3. Pick a mix of investment types
Figure out:
What types of investments do I understand and want to buy? Some types of investments may grow faster than others. A good mix of different investments (your asset mix) will help you get enough growth, while keeping losses in balance.
Am I comfortable choosing my own asset mix? If not, get some expert advice.

4. Choose specific investments
Once you know your asset mix, you can choose specific investments of each type.
Do a lot of research before you decide. Look at how an investment has done in the past and how well it may do in the future.
Again, many people get expert advice.

5. Keep track of your investments
Keep good records of your investments so you will know how well each one does.
If you have an adviser, check that he or she is following your investment instructions.