Planning your investment: 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:
  • How much money do you have for a medium to long-term commitment?

  • Do you fully understand the product that you are investing in?

  • Does the intended investment fit into your overall portfolio?

  • Have you compared returns on other similar investments?

  • 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)

  • What are your expectations towards returns on your investments? (i.e. how much returns will you be satisfied with)

  • What is your time horizon for the investment? (e.g. 5 years, 10 years, etc.)

  • Do you have the flexibility to sell the investment in the event of emergency?

  • How can you monitor the performance of your investments against your changing needs?

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Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)

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Knowledge Base ID :   1405
Last Reviewed :   May 22, 2014
Source :   BankingInfo
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