It’s another new year, 2019!
After all the hullabaloo the reality of the New Year quickly sets in. Usually, there’s a tendency to overestimate what you can do in a year financially and underestimate what you can do in a month. With the current turn of events in the economy coupled with the unpredictable political situation; there’s heavy speculation about everything. Here are six things to do before making investment decisions in 2019.
1. Draw a personal financial road-map
One of the primary reasons why most goals fail is the lack of tactical planning. Before making any investment decision, critically analyse your financial capacity. Decide the results you would want to see in the future and state exactly what you must do to achieve your written goals. That’s right, make sure you write your target figure.
Next, draft a financial road-map and identify your risk tolerance level. Most investment opportunities offer you a chance to either generate profits or risk a loss. However, there are certain investment ventures that are less risky – this is where you should focus on. Get your facts down and follow through on your road-map.
2. Evaluate your capacity in taking on risk
All investments involve some degree of risk. Investments like purchasing securities like stocks, bonds, or mutual funds entail a greater amount of risk. You could lose some or all your money and in the same way, you could gain a whole lot of money. On the other hand, the risk of investing in real estate is relatively lower and the turn over takes a longer time period. However, real-estate investments serves as an ideal long-term investment that can yield sustainable profits.
3. Create and maintain an emergency fund.
Life is highly unpredictable. While is optimistic to hope for the best, it’s wise to have a contingency plan. Always put money aside to cover emergencies like a sudden illness, family issues, unemployment and any other issues that might arise.
4. Diversify your investment portfolio
The ideal way to go about investing is to diversify your investments into short-term and long-term investments. Each category has its advantages and disadvantages. For instance, investing solely in the money market is appropriate for short-term financial goals, but the main concern here is the risk of inflation. Meanwhile, long-term investments offer a substantial way to secure retirement funds, while achieving your long term financial goals. You can hardly go wrong investing in real estate especially in Lagos state. The key to investing in real estate is to ensure factors like the location of the property, the title of the property, growth potential and zonal laws are taken into consideration.
5. Stick with Your Plan
Rule of thumb: always Buy Low and Sell High. The number one goal for investing is always to make a profit. Ensure you shift your money to the most profitable ventures. It’s important to do your research and determine which venture is profitable. Evaluate your investment portfolio regularly and identify which ventures are more profitable. Many financial experts recommend evaluating your investment ventures every six or twelve months.
6. Avoid circumstances that can lead to fraud
Scam artists follow the headlines too. That’s how they know how to trick you. Avoid quick money schemes (Ponzi schemes) and business deals that seem fraudulent. Don’t be easily cajoled by highly publicized potential investors and “opportunities” that may sound legitimate. Ask questions. Take out time to carry out your research and seek answers from unbiased sources before investing.
7. Save more to invest more
To invest more, you need to save more. Saving more entails cutting back on unnecessary spending. it’s critical to consider the volatility of the economy in making your investment decisions.
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