We all are unique, distinctive circumstances as well as specific goals. If you take a better look at that you are able to find answers to “what is the perfect investment?”
1. Money – how much are you comfortable to risk?
Have you been looking to commit a huge amount, or to continuously invest a certain amount monthly? Are you for a short run or for the long run?
Some investments need a consistent sum, like bonds or maybe when you are getting a deposit to buy properties, or a property provide the freedom of both typical contributions or lump sum, like a money ISA or perhaps stocks or shares ISA.
Several ventures have a minimum investment, therefore being aware of what you are able to pay for and if you intend to make ongoing savings or a one-time investment is crucial to determine.
2. How long can you keep your money in the investment?
Basically, how long until you will need the money invested? Specific investment items run for a determined period of time, thus in case you’ve a certain date for when you want your capital back then specific items will not be good for your situation. Additionally, some investments, like shares, are far more durable and should not be looked at as short-run investments.
Even if shares have a history that proves added value in the long term, on short term they can show fluctuations. It is best you spend cash for about 5 years to have an excellent place to minimize these possible fluctuations.
3. What will you do with the money?
All of us have various reasons to make more money, as your goal of investing is able to impact just how much risk you are willing to shoot with the cash of yours. In case you plan that your investment is to pay for your children’s education, then you might want to commit for extended periods, along with finding a greater return, as an outcome you might be willing to select a riskier investment.
Alternatively, in case you are investing money to pay for a trip around the world, or maybe a brand new house, you might be better committing for a short period and you might also wish for lower risk for the investment.
4. Are you an investor already?
In case you currently have investments and believe that your future needs in terms of finance are covered, then surely you are prepared to take higher risks. Nevertheless, being conservative in case this it your first investment is normal.
5. Your risk profile
In the worst case scenario how much are you emotionally ready to accept a loss? Not all of us are ok when the market goes up and down. This can be true in volatile markets such as cryptocurrencies. The profits can be five-ten times in a few weeks if you learn how to review the upcoming ICOs. In case that high volatility causes you not to sleep, you might want to answer to the question “Am I emotionally stable enough to have an investment?”