How To Make A Smart Investment Decision

Personal Note: This Peter's article on investing/personal finance is succinct and, I believe, easy to understand. While he used the stock market as an example, the lesson applies to various investment vehicles (including the currency market) that are available to us in this information age.

Author: Peter Gitundu

It goes without saying that the purpose for investing is to get returns from the money that one puts into the pool. For that reason therefore, every investor is out looking for what he may term as a smart investment. While the word smart is an acronym for some valuable characteristics, not many people have internalized it in as far as their money is concerned.

Putting money in a scheme is not something to be taken for granted. One needs to have a specific reason for doing so. The reason could be that one is saving for his children education, or saving to buy a home in future. With such goals in mind, one is able to choose the right kind of security. You therefore need to carry out a market survey to achieve this goal.

When you know why you are putting your money in a scheme, you are then able to measure the kind of return to expect. This is to say that once you know which type of security to buy, you are in a position to calculate the rate of return to expect. In most cases this will be determined by the market trends, but if you check out the performance of that security in the past, you will get a general idea of what to expect.

As you venture into the stock market, beware that there are many types of securities that you can buy. One way to determine which one to go for and which one to avoid is by comparing the risk versus the return. They both tend to move towards the same direction in that, as one increases the other one does too. This way, you will be able to determine whether the scheme is achievable or not.

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Peter Gitundu Creates Interesting And Thought Provoking Content on Investment. For More Information, Read More Of His Articles Here SMALL BUSINESS MENTOR If You Enjoyed This Article, Make Sure You Read My Most Recent Posts Here WHAT DEFINES OUR LIFE