What is investing?
Investing is putting your money to work to help you achieve your
personal goals. It is like a lot of things in life – rewarding but not free of risk. When you go swimming at the beach, you reduce the risk of drowning if you swim between the flags. When you invest, you reduce the risk of losing your money if you invest ‘between the flags’.
We all have different experiences and goals, so your decisions about investing may be different to those of your parents, children, workmates or friends.
The key to deciding what’s right for you is knowing your own circumstances and goals.
Questions to ask yourself
Why X What are your reasons for investing?
X Is what you hope to achieve realistic?
When X Are you ready to invest?
X What is your timeframe for investing based on your goals?
Where X Where will you invest?
X Have you considered current market conditions and your tolerance for risk?
What X Do you understand what you are investing in and is it appropriate to your needs?
X Have you checked the terms and conditions of the investment and any fees or commissions you’ll pay?
Who X Will you invest on your own or use an adviser?
X Who is selling this investment?
Don’t rush into investing. Think about what it would be like to lose all your money. Make sure you’re clear about why you’re investing and only invest in products you understand.