Guidelines to Making Good Investment Decisions and Avoiding The Bad

Sep 14, 11 Guidelines to Making Good Investment Decisions and Avoiding The Bad
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While it is virtually impossible for one to be 100% fool-proof in predicting a good or bad investment, it is possible to narrow down the playing field by following several basic principles of wise investing. This basic overview will help ensure beginning or advanced investors a margin of error when investing their funds for a good return earning.

Taking One’s Time

Whenever one has made the decision to invest a certain amount of money, the first thing that needs to be established is that it will take time to devise the following principles and a subsequent financial strategy. Investing for one’s future is definitely not something to just plunge into without careful thought and consideration.

The lightening-fast nature of the Internet is conducive and geared towards convincing surfers to make quick, impetuous decisions. Consequently, this fact needs to be on one’s mind continuously before making any investment decisions.

Know How Much Risk One Is Willing To Tolerate

Knowing the difference between an average savings/money market account and investment vehicles which form part of a portfolio is vitally important when making good investment decisions.

Typically, knowing that most investments such as: insurance, bonds, shares, commodities and U.S. Treasuries are not insured by any means is crucially important. These are not Federal Deposit Insurance Corporation (FDIC), backed as are savings accounts. The very best one can hope to invest in are low-risk entities such as U.S. Treasuries.

Do Not Succumb To Pressure

Generally, families, friends and the shoe-shine boy on the corner will all offer financial advice. Most of it will not be qualified, expert advice. Most of them will know of a cheap insurance policy, promising stock or a well-performing company that has good future potential.

Whatever they may advise or try to push, in order to avoid bad investments, it is crucial for a person to not succumb to outside pressure.

Research Well Before Investing

In today’s highly volatile, economic environment, it is primordial to carefully research a particular financial vehicle which carries out one’s financial goals the most. Carefully checking out the specific investment offered, competitive offers from other sources and how well the investment is performing is a crucial prerequisite.

Equally important is carefully researching the reputation, integrity, and historical track record of the financial institution offering the investment. This is just as important as the investment itself.

Basic Tips:

* Take time to implement a savings and/or an investment plan with a diversified portfolio.
* Determine how much risk one is willing to assume: research which investments are insured, non-secured and/or low-risk.
* Never bow down to friendly advice if it does not adhere to one’s short, medium or long-range goals.

Whether it is cheap insurance, good insurance or just plain U.S. Savings Bonds, in today’s unstable economy one cannot ever be 100% certain in investing. However, choosing wisely will definitely be an asset in achieving success or avoiding financial disaster and cutting the risks.

Nina Bernice is the author of this post and she manages the site CheapInsurance123.

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