What is Investing?
Investing is putting your money to work to create income or grow your wealth. It’s about understanding your current and future needs and developing a plan (or investment strategy) that will help you move through life.
Diversification – spreading your investment funds or “not putting all your eggs in one basket” – is considered by specialists to be one of the fundamental keys to effective investment. Smart diversification allows you to factor out much of the volatility, and hence risk, associated with your investments. The key is to shape a balanced portfolio of investments under your overall strategy, rather than considering investments individually.
Time In The Market
Time is another critical factor in determining the earning potential of your investment portfolio.
It’s vital that you have a clear understanding of what you’re actually aiming for by investing. Your objectives will directly affect the type and proportion (or asset allocation) of investments you make, the time frame you’re working towards, the total amount you should invest and the rate of return you should aim for.
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